Assessing and managing investment risk is an essential part of our disciplined fundamental value process. As a part of the prudent management of our clients’ assets, we aim to actively understand all relevant risks and opportunities including ESG specific factors.
This includes integrating ESG factors into our investment analysis, decisions and processes. As an owner of equities, we monitor ESG factors and are committed to engaging company managements and their boards, where appropriate, as a way of raising awareness and promoting sustainable shareholder value.
Attractive long-term returns correlate with responsibly managed companies. Sound Shore utilizes its influence as an institutional shareholder to encourage companies to think long-term, which includes managing and reporting on their ESG risks. It is our belief that transparency and disclosure can result in positive change that benefits both shareholders and all stakeholders.
Screening criteria are established on a company-specific basis. Our research process attempts to isolate issues that can efffect valuation, including the effectiveness of senior executive leadership, revenue and earnings growth drivers, deployment of capital, compensation alignment, transparency, governance (such as related party conflicts), and corporate strategy.