ClariVest’s commitment to Responsible Investment begins with our investment process, and identifying companies with Environmental, Social and Governance (ESG) issues that we believe have the potential to negatively impact expectations around the company in keeping with our typical expectations horizon (i.e., 6 to 24 months). We identify these companies by obtaining ratings information for a universe of 10,000 stocks with respect to (1) Norms-Based Analysis and (2) Controversial Weapons Analysis.
The Norms-Based Analysis focuses on a company’s adherence to global norms on environmental protection, human rights, labor standards and anti-corruption. The Controversial Weapons Analysis focuses on companies that are involved in the production of weapons banned under international legal instruments, or those that are particularly controversial due to their indiscriminate effects and the disproportionate harm they cause.
The ratings information described above is pushed to Portfolio Managers (PM) at each stage of the investment process, including initial idea screening, investment thesis development, at time of trade and during ongoing portfolio monitoring. We task our investment professionals with making the inherently subjective decision as to whether to invest in a company for which an ESG issue exists.