The portfolio managers use a variety of ESG inputs in their decision making process. Our ESG score (combined checklist plus quant score) is available to all teams across equities and is a direct input into the Behavioural Finance ESG funds such as European and Global sustainable strategies). Beyond this, the use of ESG varies by investment type.
Approximately USD300bn AUM is managed by fundamental research processes. ESG checklists have been completed for all investible stocks in this universe (2400 stocks) and we have either implemented or are implementing Strategic Classifications, which are an analyst judgement on the quality of a business, including ESG. Previously about half of the funds used Strategic Classifications and half used ESG outliers process - a process where the central Investment Stewardship team vetted all stocks for ESG quality.
The Behavioural Finance processes rely on the quantitatively derived ESG score (checklist and/or quant score) for assessing the ESG quality of their potential investments, although only a small portion of funds is directly run this way.
On top of formal investment processes, we also record all ESG engagements in the Spectrum database; all investment teams regularly review these as part of their investment decision making process.