Our research analysts create ESG Scorecards for each company that they research. These Scorecards are used in tandem with our Sustainable Competitiveness Scorecards, which help us rate a company’s investment potential. Our analysts rate a company across 20 factors, on a scale of 1 to 5, that address a company’s governance and the social and environmental impacts of its business. A 1 rating is the highest level of controversy/ poor track record and a 5 rating indicates no controversy/ excellent record. Ratings are then tabulated on our proprietary ESG Scorecards, which are an intricate part of a company's overall research rating. The lower its ESG rating, the more likely it will be on either the Negative List or the Watch List. ESG ratings from an external provider are included in the research process to complement our own analysts’ ratings. In addition, our Investment Committee holds an annual session to update and review the ESG Negative and Watch Lists.
ESG Scorecards are created in tandem with our Sustainable Competitiveness Scorecards, and cover numerous factors that address a company’s corporate governance and the social and environmental impacts of its business.