Our ESG and sustainable equity research is guided by our internally developed materiality map, which shows the degree of relevance of ESG issues across industry sectors.
We believe that certain ESG issues are relevant and material to long-term business fundamentals, and for that reason, important to all investors. Investment-relevant issues vary by sector, geography, asset class, and company context. Therefore, fundamental research that is tailored to different settings has potential to add meaningful value.
Given this philosophy, our ongoing ESG and sustainability research is guided by our internally developed materiality map, which is inspired by the work of the Sustainable Accounting Standards Board (SASB).
The materiality map shows that in equity research we focus on context-relevant issues for different types of businesses. We believe that this kind of tailored and forward-looking research focus has the potential to mitigate risk and to generate alpha, and be a key contributor to long-term investment results.
|Consumer||Healthcare||Financials||Tech (hardware)||Comm and Tech (software)||Industrials||Materials and energy||Utilities|
|Board structure and composition|
|Management incentives, ownership, comp alignment|
|Systemic risk management and leadership|
|Corporate purpose, culture, and mission alignment|
|Diversity, equity, and inclusion|
|Employee well-being and development|
|Supplier, distribution, and marketing management|
|Product impact and customer well-being|
|Pricing philosophy and access|
|Privacy, data security, and data use|
|Climate change risk|
|Climate change mitigation and adaptation|
|Energy intensity and renewable energy use|
|Water intensity and stress|
|Materials sourcing, intensity, and life-cycle management|
|Biodiversity and ecosystems impact|
Seeking corporate leaders in relevant areas
Our investment thesis is that companies exhibiting leadership in the sustainability issues that are financially material to their businesses also often demonstrate potential for strong long-term financial performance.
In our research process, we seek to identify corporate leadership by considering four key dimensions:
Companies with focus that is informed by thoughtful analysis of materiality and long-term business relevance
Creativity and proactivity:
Companies whose actions go beyond compliance or box-checking activity to demonstrate heightened commitment and potential benefit
Companies with goals that are specific, and produce candid and consistent reports of progress
Companies showing benefits that are meaningful both within the firm and beyond its corporate borders