The following describe several distinctive features of our firm and their alignment with our ESG integration approach:
- Fiduciary mindset: We believe ESG integration is about analysis and action that help maximize the long-term value of our clients’ portfolios.
- Long-term perspective of a partnership structure: Our ownership structure allows us to have longer investment horizons that consider longer term ESG risks.
- Active management: We have a long history of conducting fundamental research and engaging directly with companies on material business issues.
- Our size and access: Our size and access to company management teams give us a voice to influence outcomes on ESG issues where we think it can benefit our clients.
In addition, innovation, new ideas, and client solutions continue to be a cornerstone of our culture and a key area of partnership with our clients. In particular, we are focused on partnering with our clients to develop solutions related to sustainable investing that address their unique goals. For example, at the suggestion of a client, we have implemented a low carbon equity strategy managed by our Quantitative Investment Group which aims to address the transition risks of climate change. Global Environmental Opportunities, Global Impact, and Global Impact Bond are three broadly available strategies we currently offer that we believe have a low carbon footprint as a result of the respective investment team's philosophy and focus on ESG.
Our approach to impact investing is also innovative. In 2015, we launched Global Impact, a global equity portfolio that invests in stocks that have at least 50% of their revenue to solving a measurable social and environmental impact (this is determined by Wellington’s proprietary bottom-up global fundamental research). From this threshold of currently roughly 500 stocks, we build a portfolio with a total return objective of 200-300 bps over a global equity index.
In 2017, we developed and launched a fixed income version of Global Impact. In this approach, we seek to apply the same impact philosophy and standards to a broader opportunity set across the public debt markets – including mortgages, governments, agencies, municipals, and corporate bond issuers.