Environmental, Social and Governance (ESG) integration
We define ‘ESG Integration’ as the explicit inclusion of Environmental, Social and Governance (ESG) factors in the decision-making process.
This means understanding which of these factors may impact future performance of our investments, and in turn taking the appropriate steps to minimise any negative impact this may have.
Why is this important to us?
In simple terms, by understanding how these E, S and G factors may impact investments, we believe this allows more informed investment decisions to be made, which in turn, results in better outcomes for our members.
Integrating ESG factors in our processes not only helps with investment decisions, but also in guiding the future relationship we build with the companies we invest in. By understanding areas where these companies need to improve means we can target our engagements to promote development and influence change.
Where does this happen?
We will have ESG factors integrated across all our investment solutions, not just a specialist few.
What does it look like?
To support their investment teams, RLAM has an in-house team of professionals dedicated to responsible investing and ESG subject matter expertise. This team helps support fund managers and analysts to embed ESG risks and opportunities across equity, fixed income and property investment processes.
RLAM use a mix of internal and external ESG research to inform our investment decisions. By overlaying third-party research with our bespoke in-house expertise, they can evaluate and monitor principal adverse ESG risks relevant to a specific asset class or fund.
Much of their in-house research activity has been centred on providing the means to empower and enable fund management teams to integrate ESG into their processes.
Over the past year, RLAM has developed their own bespoke ESG Dashboard, which serves as a central repository for housing ESG research, details on engagements, proxy voting and specific material ESG risks at the issuer level, as well as entity scores.