We believe a better way to invest is to take a holistic view that seeks to fully integrate ESG factors into the investment research process. We do not look to exclude companies or sectors from our universe, but rather aim to analyze and monitor the ESG issues that may have material impact on the financial performance of our portfolio companies in the near and long term. In our minds, ESG issues should be viewed as risk factors that contribute to the balance between potential risk and expected return, and should be examined alongside traditional financial and operational risk factors. By identifying and incorporating relevant ESG risk factors into our research process, we can potentially minimize the impact of negative ESG related developments and uncover investment opportunities that may benefit from ESG related trends.
As a further enhancement to our process, we have formally included a review of ESG integration into our risk management meetings. In partnership with State Street Bank, we have become early adopters of ESGX, a platform that allows you to assess ESG profiles and risk factors at the portfolio level. With the ESGX tool, we can generating reporting that enables us to visualize and gain better insight into ESG exposures at the sector, region and company level, and help identify and highlight potential sources of ESG risk that may be overlooked when deploying traditional financial analytics.