Environmental, social and governance (ESG) factors
We look at the following factors as a starting point for our responsible investment process:
A company's impact on the natural world:
- Climate change
- Biodiversity loss
- Resource scarcity
- Waste and pollution
The wellbeing and rights of people and communities:
- Human rights
- Labour standards
- Working conditions
- Data protection
The standards for running a company:
- Bribery and corruption
- Executive pay
- Board structure
- Political contributions
Integrating ESG into equity research
We use qualitative analysis to identify challenges and opportunities and overlay this with quantitative data for a robust research process.
As steward of our clients’ assets, we protect and enhance long-term returns through voting and engagement.
Integrating ESG into fund selection
Quilter Cheviot is one of the largest fund buyers in the UK market. We have a specialist fund research capability responsible for monitoring around 300 closed and open-ended funds. Funds are selected in accordance with Quilter Cheviot’s investment strategy, involving both quantitative and qualitative analysis, with significant importance placed on meeting the individual fund managers and their teams.
When we invest via a third-party fund, one of our considerations is how the manager incorporates environmental, social and governance (ESG) factors as well as stewardship practices into their investment process, alongside traditional financial metrics. For us, taking environmental, social and governance issues into account is about ensuring all potential risks to an investment are considered. At worst, not considering ESG factors might lead to reputational and financial damage for companies that are not managing these issues effectively.