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ClearBridge Investments

PRI reporting framework 2019

You are in Strategy and Governance » Innovation

Innovation

SG 18. Innovative features of approach to RI

18.1. Indicate whether any specific features of your approach to responsible investment are particularly innovative.

18.2. Describe any specific features of your approach to responsible investment that you believe are particularly innovative.

We integrate ESG analysis across our fundamental analyst platform. Sector analysts, who specialize in specific sectors, and portfolio analysts, who support specific investment teams as generalists, are responsible for both financial and ESG research and analysis. Our ESG analysis plays a meaningful role in valuation discussions, training, internal meeting notes, compensation structure and appraisal process, among other activities. We believe in the significance of the inclusion of ESG factors and incorporate them throughout our analyst platform. Our goal is formal ESG analysis, engagement and reporting across the entire firm's assets. We are currently at 93% of AuMs are ESG integrated.

Our CEO is the driving force behind our ESG analysis, and sets the tone on ESG at the firm, along with our co-CIOs, one of whom also co-manage ESG strategies.

We publish an annual Impact Report that details our wide variety of ESG research and the impact we have as active investment managers. This helps communicate our impact to clients, who often ask about the change effected by their invested assets. It is also available to the public. We also produce annual engagement reports for each ESG-focused strategy. This is an extensive exercise and is carried out by our fundamental analysts. 

We have also instituted a formal, proprietary ESG Ratings process (AAA, AA, A) for stocks held in ESG strategies, as well as companies that are under review, or not yet suitable for ESG portfolios ("B" Rating). Analysts include their proprietary ESG rating in company notes that are distributed across the platform.

In addition to our numerous ESG separate account strategies and active ESG ETFs, we also offer our Sustainability Leaders Strategy, which is a concentrated high active share strategy seeking to invest in companies with compelling investment attributes and industry leadership sustainability initiatives. This strategy could be considered both a thematic and low-carbon approach.


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