WellsCap is committed to the following principles that underlie our investment beliefs regarding ESG:
- Strategic client relationships: Through a client-centric approach, we initiate conversations with our clients to better understand their needs and then seek to achieve alignment with their ESG objectives through the development of appropriate investment strategies.
- Independent investment teams: We believe that an organization of independent and specialized investment teams is the optimal structure to achieve consistent outperformance and risk-adjusted returns. Our portfolio management and research teams integrate ESG considerations into their analyses and decision-making processes where they believe these issues may affect the success of an investment.
- Independent risk management: As active managers, we believe that companies that perform poorly on ESG demonstrate higher downside risk that is unrewarded in achieving long-term risk adjusted returns. To empower our investment teams, we incorporate ESG research and analysis into our independent risk management functions, providing proprietary tools and services that help investment managers better understand the ESG risk profiles of investments.
- Active ownership: As signatories to the Principles for Responsible Investment and the Japan Stewardship Code, we take our role as active owners seriously. The relationship we have with our investments doesn't end once we invest; to ensure the sustainable growth of our investments, we vote our proxies and engage in dialogue on ESG issues, encouraging best practices across our portfolios – and helping us deliver superior long-term risk adjusted returns.
Ultimately, considering ESG in our investment strategies contributes to our number one priority: generating positive investment outcomes for our clients.
How WellsCap approaches ESG
We believe ESG investing is investing in a better future.
Our primary focus is on generating positive outcomes for our clients. For us, strong ESG practices can be seen as good business practices; we believe that by integrating ESG approaches with clients’ unique values we can improve investment outcomes for a better future, together.
In terms of different ESG investment approaches, we identity investor motivations and align our approach to address them. Underpinning our ESG investment approaches are two foundational commitments: Stewardship and ESG Risk Management.
- Stewardship refers to our commitment to impel investee companies through activities such as engagement and proxy voting in making positive changes on ESG issues to promote long-term value creation.
- ESG Risk Management is part of our firm-wide risk platform, Portfolio Risk Management and Analytics (PRMA) overseen by the Office of the CIO. This dedicated team and function provides proprietary tools to identify the most significant risks relate to ESG issues across all strategies and at the firm aggregate level.