We believe that investing in companies with high quality environmental, social and corporate governance (ESG) standards ultimately leads to greater value creation and enhanced risk management for our clients and also contributes to the long-term sustainability and health of the global economy.
As long-term investors, ESG characteristics play an important role throughout our investment approach. They are embedded into our rigorous fundamental bottom-up research process as one of many dynamics that lead to our decision to invest in any given company. We believe that strong ESG attributes generally lead to increased revenue growth, productivity, innovation and leadership. They also reduce regulatory, litigation and reputational risk. Management teams that cannot articulate risk factors inherent in their businesses are not considered for investment. Additionally, demonstrated incompetency when confronted with “surprise” events are considered negative factors for investment attractiveness. We believe that management teams that have considered their policy impact on ESG issues invariably will be more competitive in their respective industries.