IMPACT & ESG

What is ESG?

Environmental, social and governance (ESG) is the practice of incorporating ESG information into investment decisions to help enhance risk-adjusted returns, regardless of whether a strategy has a sustainable mandate.

ESG is often used interchangeably with the term “sustainable investing.” We see sustainable investing as the umbrella and ESG as the data toolkit for identifying and informing our solutions.

ESG data is most often categorized as “non-accounting” information because it captures components important for valuations that are not traditionally reported. Company valuation has become more complex, with a growing portion tied up in intangible assets. ESG metrics provide insights into these intangibles, such as brand value and reputation, by measuring decisions taken by company management that affect operational efficiency and future strategic directions.

Environmental

Covers themes such as climate risks and natural resource scarcity pollution and waste, and environmental opportunities

Social

Includes labour issues and product liability, risks such as data security, and stakeholder opposition

Governance

Enompasses items relating to corporate governance and behaviour such as board quality and effectiveness

Our activities to integrate sustainability considerations into the investment process mirror the diversity of clients we serve, as well as the range of investment strategies and asset classes we offer.

Each member of our investment team is responsible for implementing E.S.G. approaches in line with its investment mandate and is required to have a formal E.S.G. integration statement to underpin its respective approach. Our portfolio managers are able to bring useful E.S.G. information into their investment processes, discounting or emphasizing this information as they would any other financial input.