investment approach

ESG INTEGRATION

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) INTEGRATION

Our company is acutely aware of the impact that matters of a non-financial nature such as those presented by environmental, social and governance (ESG) factors have on investment decision-making. Although these factors are considered in investments that we make, we acknowledge that there are elements that are lacking in terms of ESG integration throughout our entire value chain.

Portable alpha, also known as “alpha transport”, refers to the ability of a portfolio manager to extract the alpha generated within any investment portfolio from the beta, and to then apply this outperformance to any other asset class the manager chooses, which ultimately eliminates the market risk of the manager’s portfolio.

So the sweet spot for us on the relative / absolute return continuum is the cross-section where the return objective leans towards actively exploiting investment opportunity through skills sets, and the risk objective is not to take more than market risk when replicating or beating a benchmark.

An example of our Fixed Income strategy pool limits (risk parameters)

Steps in our process Progress
Gather information and produce research Completed
Develop ESG Policy Completed
Workshop underlying managers to set time-table Completed
Managers to develop and submit ESG Policies Completed
Resolve practical concerns with managers In progress
Develop manager-readiness matrix Not started
Workshop underlying managers in terms of report design Not started
Gather client inputs and finalise report design Not started
Client feedback and on-going reflection based on effectiveness Not started

Please click here [PLEASE NOTE THESE LINKS CAN ONLY BE ADDED ONCE IT IS COPIED ONTO YOUR CERVER] to access our ESG research piece on the behavioural dynamics, practices and contextual issues associated with the integration of ESG considerations into an investment management process.

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