Eaton Vance Corp. Responsible Investment Philosophy
Eaton Vance provides advanced investment strategies and wealth management solutions to forward-thinking investors around the world. Through principal investment affiliates EVM, Parametric, Atlanta Capital and Calvert, Eaton Vance offers a diversity of investment approaches, encompassing bottom-up and top-down fundamental active management, responsible investing, systematic investing and customized implementation of client-specified portfolio exposures. Exemplary service, timely innovation and attractive returns across market cycles have been hallmarks of Eaton Vance since 1924.
Across our investment affiliates, we include consideration of environmental, social and governance (ESG) insights in our evaluation of investment opportunities and/or in the construction of the investment portfolios we manage. In our discretionary decision-making processes, we focus on ESG criteria we consider financially material. We define financially material ESG criteria as ESG risks or opportunities likely to affect the financial condition or performance of the issuer over a long-term investment horizon. We are active owners. Each of our affiliates addresses ESG issues in their own unique way, which may include direct dialogue with companies, proxy voting and/or other engagement activities.
Our multi-affiliate model affords clients the opportunity to choose among a range of investment approaches. Calvert offers responsible investment strategies that incorporate disciplined ESG research and structured engagement as core principles. EVM offers equity, income, alternative and multi-asset strategies that may integrate consideration of financially material ESG factors into fundamental research processes seeking to enhance each portfolio’s risk/return profile. Atlanta Capital applies a fundamental approach to investing in companies identified as high-quality, analyzing financially material ESG issues as a component of the investment research process. Parametric specializes in rules-based systematic investing and customized implementation of benchmark-based portfolios that offer clients the ability to align their investment exposures with their personal values.
Our approach to responsible investing is both flexible and evolving. Our affiliates’ portfolio managers and analysts seek to understand the potential impacts of how issuers manage ESG risks and opportunities using both proprietary and third-party research. Because these risks and opportunities vary across industries, geographies and business models, we believe that maintaining a focus on financial materiality is necessary to effective responsible investing.
Our governance structure for incorporating ESG insights into investment decisions and portfolio construction has two tiers. The first level is the Responsible Investing Leadership Team, which includes selected equity and fixed income chief investment officers from various affiliates, Calvert’s chief executive officer and other senior investment leaders. The Responsible Investing Leadership Team meets quarterly to discuss emerging developments and to track progress as it relates to responsible investing and ESG integration.
The second tier of the governance structure is the Research Working Group, whose membership consists of selected analysts and portfolio managers from our affiliates representing diverse investment strategies and multiple office locations across the globe. The group meets monthly to discuss new ESG information and best practices, and reports to the Responsible Investing Leadership Team at least quarterly.
We believe that active engagement is an essential component of responsible investing. In addition to direct dialogue with issuers, our affiliates may use their power as shareholders to vote proxies in accordance with their guidelines.
Additionally, Calvert offers a structured form of engagement. Informed by proprietary ESG research, Calvert analysts identify financially material issues on which to engage with company management. Calvert believes that by working with companies to address areas for improvement, companies can improve their performance on these material environmental, social and/or governance issues, as well as improve Calvert’s position as a shareowner. These improvements may, in turn, elevate both company and industry standards, offering the potential for positive societal and economic impact.
At Calvert, dialogues with issuers that do not result in desirable outcomes may result in the filing of shareholder resolutions, sometimes in collaboration with other like-minded investors and coalitions. In a time when many investment managers claim to be working toward similar goals, Calvert is among the few to regularly bring material ESG issues to a vote at shareholder meetings.
A History of Dedication
A leader in responsible investing, Eaton Vance has been a signatory of the United Nations Principles for Responsible Investment (PRI) since 2015. Eaton Vance acquired the business assets of CIM in 2016, which has further inspired and served as a catalyst to significantly advance Eaton Vance’s commitment to leadership in responsible investment. CIM became a founding signatory of PRI in 2006 and Parametric became a standalone signatory in 2018.
Eaton Vance’s primary goal in incorporating material ESG factors into investment processes and engagement efforts is to develop a more comprehensive review of investment risks and opportunities and to seek to unlock investor value. We believe this holistic approach provides direct benefit to clients. As the availability of ESG information and consideration of ESG factors by corporations, consumers and governments continue to evolve, so will our investment approach.
 Eaton Vance’s controlled subsidiaries in Europe, Eaton Vance Advisers International, Ltd and Eaton Vance Global Advisors Limited, follow the same approach to responsible investing as EVM.