Approach to ESG incorporation:
Janus Capital Management is a fundamental investment manager with an intensive, bottom-up investment process, focused on maximizing long-term returns while minimizing risk. We understand Environmental, Social and Governance (ESG) factors as critical externalities which impact the long-term viability and value of a business. Many of these factors elevate the importance of proper corporate governance and mark the difference between management teams who are willing to think long-term and those more interested in short-term profit optimization at the expense of the future viability of the business.
At Janus, we practice a bottom-up approach to research which seeks to deeply understand both the company and the ecosystem within which they operate. In addition to rigorous modeling and competitive analysis, we consider externalities such as ESG as a significant part of our research process. Often times, environmental, social or governance concerns uncovered by our research serves to remove a company from investment consideration.
Reason for choosing integration alone as our ESG strategy:
Janus has always viewed understanding ESG issues as an important part of our fundamental research process (although we didn't call it ESG); which is why it remains embedded in the fundamental research of our analyst teams. Our implementation of ESG requires that we consider these factors; however, we choose not to restrict our investable universe by excluding investments that do not meet certain criteria. Even companies with poor ESG profiles can offer compelling investment opportunities, in certain circumstances.