Environmental, Social and Governance Investing
Over recent years, as the responsible investing sector has become increasingly prominent, so the landscape has become crowded and boundaries blurred. The race to launch new Environmental, Social and Governance (ESG) products and to grab a share of this growing market has created unnecessary confusion and complexity.
Environmental, Social and Governance, ESG, refers to a subset of non-financial performance indicators, which measure the sustainable and ethical impact of an investment. ESG factors can be used to evaluate corporate behaviour and to determine the long-term financial performance prospects of a company.
Increasingly, socially conscious investors are using ESG factors to screen potential investments and many larger firms are beginning to track their ESG progress. Environmental criteria look at how a company performs as a guardian for the environment, their impact on climate change or carbon emissions, water use or conservation efforts.
Social criteria focus on a company’s ability to manage relationships with its employees, clients, suppliers and the local communities in which it operates.
Governance examines a company’s leadership, shareholder rights, audits and internal controls, anti-corruption policies, board diversity, executive pay and human rights efforts, for example.
Omnis is committed to active investing and strives to be responsible stewards of our clients’ investments within a framework of good governance and transparency. Core to our investment philosophy is the belief that well-governed companies are better positioned to manage the risks and challenges inherent in business and to capture opportunities that help deliver sustainable growth and returns for our clients.
We firmly believe, therefore, that effective stewardship will benefit companies, our clients and the economy as a whole. An important consideration in the selection of our investment managers is that they have integrated environmental, social and governance analysis into their investment processes.
In our Omnis ESG Investing guide, we look to dispel some of the myths and explain some of the key terms to help demystify this important area of investment. This guide will be reviewed and refreshed regularly, to keep you informed of the latest market developments and to share Omnis’ activity in this area.