In managing our internal listed equity exposure we adopt a common sense ESG overlay. In doing so, we seek to understand what we are investing in, what risks (including ESG risks) are present and to then establish whether we are comfortable with those risks. ESG considerations and analysis are a critical risk issue, so while we may use quantitative techniques to develop portfolios, there is typically a fundamental overlay to determine the final portfolio.
Further, 95% of our investments are in developed market companies and have a strong focus on quality - quality companies, quality management, and strong balance sheets. Again, ESG considerations and analysis play an important role in assessing the over all quality of a company / investment opportunity.
Passive funds are used for liquidity and for tactical asset allocation - typically, once a decision has been made to invest in a sector, we use passive funds until an active manager has been chosen.