Describe how you incorporate ESG
We fully incorporate consideration of ESG factors into our investment research process. We systematically monitor ESG issues in manager research and gather data on all managers’ ESG credentials as a formal and early step in the evaluation process. ESG data is then monitored on an ongoing basis. All new due diligence reports incorporate ESG considerations. Given the rapid evolution in this area, we are constantly updating this analysis. Over 2018 and 2019 we undertook a project to expand the amount of ESG data we collect from both public and private managers as part of our investment process. This has included expanding analysis of specific climate change risk metrics for example. Other data captured includes multiple details on ESG integration, exposure to controversial areas, the use of ethical exclusions and reporting/transparency. In 2019 we also on-boarded new climate risk tools for portgfolio level resewarch (scenario analyusis and new Value-at-Risk models)
With regards to stewardship, given we invest through third party managers we analyse the robustness of their stewardship (voting and engagement) policies, implementation and reporting as part of this ESG due diligence. For private investments, we consider how ESG initiatives are actively supported in underlying holdings.
We also use this systematic data, along with use of third party ESG analytical tools on underlying holdings where appropriate, for bespoke ESG reviews and screening of client portfolios and the underlying holdings of investment managers. This covers ethical exclusions, controversies exposures, positive impact measurement, and climate risk metrics (e.g. emissions, emissions intensity, fossil fuel reserves exposure)
Additionally, our dedicated ESG investment research resources track over 1,000 ESG strategies across the entire spectrum from socially responsible strategies through to specialist impact investment strategies in all asset classes.