Investment strategies managed in accordance with ESG principles have been around for decades. More recently, an increasing number of investment management firms have incorporated these factors into their analysis. Some managers have come to recognize that considering ESG factors when evaluating a company increases the robustness of their investment process, while others have adopted ESG to meet the demands of an increasingly ESG-aware marketplace.
We have evaluated public markets investment strategies that incorporate ESG considerations as part of our manager research effort for about ten years. In this research note, we provide an overview of our ESG evaluation process, the rating system we have developed to categorize these strategies, and our thinking behind each rating.