BAML is committed to seeking to deliver the best possible risk-adjusted returns for our clients and we believe responsible investment supports this aim.
We view responsible investing as one approach within the wider discipline of impact investing, which recognises all investments have an impact that should be considered as part of the investment decision-making process. A Responsible approach, as distinct from Sustainable or Catalytic approaches, focuses primarily on the risks and opportunities highlighted by ESG factors. In addition, we see this approach as distinct from ethical investing which applies pre-determined criteria, based on religious beliefs, broadly-accepted global norms, or even an individual investor's personal values, to decide whether an investment is appropriate to hold.
We believe ESG considerations capture non-financial information that could affect financial performance. By considering these ESG factors, and consequently a broader set of data, we believe our investors are enabled to make a better judgement about the financial performance and longer term viability of an investment. Therefore, as part of the investment process, we seek to include any foreseeable risks and opportunities that arise from material ESG factors.
A majority of the assets we manage on behalf of our clients are invested indirectly, through third party fund managers. Nonetheless, our approach to undertaking responsible investment is relevant across all the asset classes, sectors and markets in which we invest.