What Is Responsible Investing?
Responsible investing is the integration of environmental, social and governance (ESG) factors into the investment process to help better manage risks and improve returns for clients.
What Are ESG Factors?
ESG factors refer to environmental, social and governance issues that investors can use to help evaluate a company. Companies that perform well in these areas, or are showing improvement, can benefit society while reducing risk and improving returns to shareholders.
- Climate change & carbon emissions
- Water & wastewater management
- Air quality
- Energy efficiency
- Biodiversity & deforestation
- Responsible packaging
- Employee diversity
- Health & safety
- Human rights
- Labour standards
- Data privacy
- Societal harm of product use
- Board independence & diversity
- Executive pay
- Corporate ethics
- Accounting practices
- Legal & regulatory compliance
- Shareholder rights
Are There Different Approaches to Responsible Investing?
Yes, there is a wide variety of approaches to responsible investing that a manager could implement. At Bridgehouse, we believe it’s essential to conduct ongoing due diligence and to understand the approach used by your investment manager. In general, we view responsible investing as a pyramid with different levels – building upon one another.
Attempts to deliver positive and measurable social or environmental benefits (e.g., affordable housing, medical facilities, renewables, etc.)
Embeds sustainable themes-based assessment in portfolio construction (e.g., gender equality, low carbon, clean water, etc.)
Invests in companies that support a greener, healthier, safer and more equitable world
Evaluates ESG risks and opportunities as part of the fundamental assessment of a business
As long-term stewards of client capital, takes responsibility to understand complex relationships between business, society and the environment
What Is Bridgehouse’s Approach to Responsible Investing?
Bridgehouse encourages responsible investing within the asset management industry by partnering with investment managers that evaluate and integrate environmental, social and governance (ESG) issues into their investment process and allocation of client capital. Therefore, at a minimum, the managers on the Bridgehouse platform are positioned in the “ESG Integration” level on the Responsible Investing Pyramid.
For more details on each investment manager’s approach to Responsible Investing, please see below.