Sustainable and responsible investing is gaining momentum as more and more investors, both institutional and individual, are looking to have their portfolios reflect their values and make a difference in the world. Assets invested in sustainable and responsible strategies have been growing at impressive rates. At the beginning of 2016, about one in every five dollars under professional management in the US, or $8.72 trillion, used some form of sustainable and responsible strategy, an increase of 33 percent from $6.57 trillion in 2014.1
Sustainable and responsible investing goes by many names: SRI, socially responsible investing, impact investing, ethical investing, etc. Regardless of the name, at the core of sustainable and responsible investing strategies is the use of environmental, social and governance (“ESG”) factors in the investment process (security selection and portfolio construction), as well as the use of proxy voting and corporate engagement to affect change.
The use of ESG factors is part of a disciplined approach to investment research and analysis. Such factors as environmental responsibility, health and safety practices, labor relations, diversity, human rights records, community involvement, and corporate governance practices are good indicators of corporate citizenship. At the same time, they are sound risk management tools. More importantly, they can have meaningful impact on a company's brand value and financial performance over the long-term.2
Through a collaborative process and customized service, ESG Research Associates works with investment professionals to understand sustainable investing and to help integrate ESG factors into the investment decision-making process. In addition, ESG Research Associates works with clients to develop proxy voting policies and practices, and provides guidance on corporate engagement initiatives.
So whether you are an investment manager just starting to think about sustainable investing and ESG integration, or if you are looking to build out your existing sustainable investing practice, ESG Research Associates is available to guide you along the path.
1 Report on US Sustainable, Responsible and Impact Investing Trends 2016, The Forum for Sustainable and Responsible Investment, US SIF Foundation
2 The Impact of Corporate Sustainability on Organizational Processes and Performance,
Robert G. Eccles, Ioannis Ioannou, George Serafeim, Working Paper 17950
http://www.nber.org/papers/w17950, NATIONAL BUREAU OF ECONOMIC RESEARCH,