We proactively incorporate ESG into our security selection process where we can demonstrate that ESG data adds value.
We collate ESG data from a variety of sources. The sources are diverse and change over time as new datasets become available or are made redundant. From this data, we create our own proprietary blend of ESG signals, analysing it to determine whether it provides insights into share price movements. Then, identified ESG signals are integrated into the investment process whereby share price targets are adjusted up or down where relevant for all stocks in the investable universe. This results in an adjusted forecasted share price target which is then ranked and optimised for portfolio construction.
In the case of where the client stipulates certain exclusions – whether this be by sector, industry group, industry, sub-industry, theme or individual securities – these are removed from the investable universe prior to portfolio construction. We also run strategies based on low carbon requirements, applying a carbon intensity score to each security in the investable universe.
Where clients wish to invest along thematic lines, we will assist clients in clearly defining the theme’s parameters, prior to the strategy’s launch, to ensure expectations are fulfilled.