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As an active manager, it’s our duty to consider all factors that can pose a risk to or enhance client assets. We have added to our extensive fundamental research effort by launching an innovative responsible investment (RI) ratings system that combines an assessment of a company’s financial stewardship with a view on how well it manages its Environmental, Social and Governance (ESG) risks.
How do RI ratings work?
The financial stewardship model draws on academic models that measure prudent, long-term financial governance to identify well-managed businesses. It then applies a proprietary company stewardship rating, which complements the fundamental and risk perspectives of our investment teams.
The ESG materiality model builds on the Sustainability and Accounting Standards Board (SASB®) framework, which identifies the most financially material sustainability factors for 77 distinct industries. It provides insight into management focus and operating practice standards, supporting fundamental analysis.