ESG integration

The four steps of our ESG integration process

Identification

Research analysts identify key ESG and non-ESG factors specific to the company, sector or country.

Assessment

Research analysts assess for each factor whether it is material to the fundamental characteristics of the issuing party.

Processing

Research analysts incorporate the relevant impact of ESG factors into the overall credit assessment and their credit advice. The assessment and advice serve as a starting point for discussion with portfolio managers.

Integration

Portfolio managers incorporate analyst advice into portfolio composition in accordance with the client's mandate.

Our ESG integration process focuses on managing financial risks and identifying opportunities by including additional information in investment analysis to help inform our decision-making. ESG integration does not seek to make ethical judgements. Instead, we seek to systematically uncover financially material ESG risks and opportunities to ensure they are appropriately priced in the investment being considered.

Examples of ESG factors we may consider in our investments, depending on their materiality to the issuer’s key activities and operational practices:

Research teams may include ESG-related factors in their analysis if they are applicable to the asset class. The assessment and results may differ.

 

Environmental Social Governance

Greenhouse Gas emissions

Water and wastewater impacts

Hazardous materials and air quality

Biodiversity impacts

Material sourcing

Product design and lifecycle management

 

Human rights and stakeholder engagement

Data privacy

Product safety and sales practices

Health and safety

Labour management

Supply chain management

Governance structure

Accounting practices

Remuneration

Business ethics, fraud and corruption