Investment relevance

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
Governance
Board structure and composition
Management incentives, ownership, comp alignment
Systemic risk management and leadership
Corporate purpose, culture, and mission alignment
Social
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
Environmental
Climate change risk
Climate change mitigation and adaptation
GHG emissions
Energy intensity and renewable energy use
Water intensity and stress
Materials sourcing, intensity, and life-cycle management
Biodiversity and ecosystems impact
Usually relevant
Often relevant
Sometimes relevant

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:

Materiality

Materiality:

Companies with focus that is informed by thoughtful analysis of materiality and long-term business relevance

Creativity and proactivity

Creativity and proactivity:

Companies whose actions go beyond compliance or box-checking activity to demonstrate heightened commitment and potential benefit

Transparency

Transparency:

Companies with goals that are specific, and produce candid and consistent reports of progress

Impact

Impact:

Companies showing benefits that are meaningful both within the firm and beyond its corporate borders