FOR CLIENTS

Value Creation

Investing with an impact lens, i.e. considering environmental, social and governance (ESG) factors, enables investors to spot companies with a superior capacity for long-term value creation.

Risk Migration

There is growing evidence of a correlation between high ESG scores and risk mitigation. A recent MSCI study found strong evidence that companies with strong ESG profiles are better at managing both investment risks and opportunities.

Values Alignment

With the growing awareness of climate change, clean energy, and the benefits of social inclusion, workplace fairness and community development, more investors are seeking a values-aligned investment portfolio.

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An investment’s social policy could cause it to forgo opportunities to gain exposure to certain industries, companies, sectors or regions of the economy which could cause it to underperform similar portfolios that do not have a social policy. There is no guarantee that any investment strategy will be successful. Risks associated with investing in Environmental, Social, and Governance (ESG)-related strategies can also include a lack of consistency in approach and a lack of transparency in manager methodologies. Some ESG investments may be dependent on government tax incentives and subsidies and on political support for certain environmental technologies and companies. There may also be challenges such as a limited number of issuers and the lack of a robust secondary market. There are many factors to consider when choosing an investment portfolio and ESG data is only one of those components. Investors should not place undue reliance on ESG principles when selecting an investment.