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ESG Informs Fundamental Research

March 29, 2018 | Global/Emerging Markets


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Environmental, social, and governance (ESG) factors are fully integrated into the William Blair Global Equity team's investment process, playing an integral role in how the team evaluates the long-term growth opportunities and risks for companies, says Blake Pontius, CFA, portfolio specialist, and Romina Graiver, portfolio specialist.

Watch the video or read the recap below.

 

Pontius: In many ways our core investment philosophy and process have been naturally aligned with environmental, social, and governance (ESG) factors—in particular, strong corporate governance, which has really played a key role in our assessment of management quality. More recently, we've been focusing on environmental and social factors.

Graiver: ESG is fully integrated into our investment process so it's really part and parcel of how we evaluate the long-term growth opportunities and risks for companies. Part of that integration of ESG in our investment process is really having this objective data and these subjective inputs as well from analysts, and it's all available and integrated in our research platform, Summit.

Pontius: ESG considerations are part of our fundamental research process, informing our discussions with management beyond traditional financial factors.

Graiver: There is also an opportunity cost of a subpar corporate governance—allocation of resources and capital, and actually lack of diversity, for instance. And that's why it's important to pay attention and look at these ESG factors and the records of companies on ESG. And that's why we look at ESG as an additional lens that complements the financial analysis and gives us a more holistic view of companies, risk, and opportunities, and the sustainability of future returns.