Our ESG integration approach

Our internal approach to ESG analysis

Getting a GRIP on ESG: our proprietary fundamental analysis approach to investing

Learn about our ever-evolving GRIP framework that guides how we integrate environmental, social and governance factors into the evaluation of our investments. Here, we outline how this approach can improve our understanding of the companies we invest in, provide a logical and coherent way of addressing the challenges of responsible investing, as well as bringing important positive change to the world around us.

Our investment approach is rooted in proprietary fundamental analysis. Environmental, social and governance (ESG) factors are integrated in the evaluation of investments, using our GRIP system.

We believe the integration of ESG factors can improve our understanding of the companies in which we invest. More broadly, paying regard to ESG issues can bring positive change for society and the environment. We recognise, however, that ESG ratings are not perfect and have room to improve. Among the challenges we observe, there is the potential for different methodologies to produce conflicting results. The process of arriving at ESG ratings may also be difficult to comprehend. Therefore, to best meet the needs of our clients, fulfil our due diligence requirements and remain responsible for our judgements, we have built an internal approach to ESG analysis: GRIP our Global Responsible Investing Platform.

We believe ESG integration is most effective when it is fully embedded in the investment process, rather than applying a simple overlay of external ratings. While GRIP is owned and controlled by the ESG team, only a continuous dialogue with financial analysts and portfolio managers and the companies in which we invest can help us to correctly identify ESG issues. Working together we can better identify, analyse and integrate the ESG factors most likely to have a material impact on the long-term performance of an investment.

In this document we will describe the framework we are setting up for EFGAM. While we believe it is an advanced integration approach it will continue to evolve. ESG integration is a long term journey.

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