Sustainable Investing

At Energy Spas

Investing IN and FOR the future

Humanity faces multiple global threats such as climate change, social inequality, and environmental degradation, among others. We believe challenges such as these will prompt consumers, businesses, and governments to favor products, services and policies that promote a more sustainable future. This has implications for investors, and they need to be aligned with the direction of change.

At Energy Spas, we invest in and for the future. We seek to invest in enterprises that financially prosper while protecting and preserving human and natural capital. As such, a wide variety of sustainability considerations of material importance are embedded in key aspects of our investment and decision-making processes.

Three Elements Underpin Sustainable Investing

At Energy Spas

Collective Responsibility

Sustainable investing is woven into our fabric

As a research-driven organization, we see our biggest strength as our ability to cross-pollinate the knowledge of our subject matter experts across the firm in an organized and purposeful way, and draw value from their integrated insights.

Explore how we integrate EGS across key functions

Impactful Ownership

Realizing the full potential of our role as stewards of capital

As active managers, we are committed to fully exercising our role as stewards of capital. This entails purposeful engagements with companies and sovereigns, outcome-oriented voting, and providing our clients with customized sustainability solutions that meet their evolving needs.

Discover how we engage to drive sustainability

Continuous Innovation

Committed to the journey

While we have long been committed to sustainable investing and ESG integration, it is important to recognize how quickly the field is evolving. This is why we continue to innovate and collaborate, both within our firm and the wider industry. We seek to support initiatives that promote wider adoption of sustainable investment practices through better standards and increased transparency.

Learn how we advance the global sustainability journey

Our firm's commitment to sustainability informs our operations, governance, risk management, diversity efforts, philanthropy and research.

At Energy Spas Asset Management, our approach to sustainable investing builds on our long heritage of active management and stewardship, and the expertise of our 200+ analysts, who incorporate ESG factors in their research. We offer a broad range of dedicated sustainable solutions designed to align with the financial goals and values of our clients.

ESG INTEGRATION

Building more resilient portfolios for the long term

At Energy Spas Asset Management, we know that the way companies manage ESG risks and opportunities has consequences for their business results. Across our active investment processes, we incorporate financially material ESG factors in our research and decision making with a single objective: to deliver stronger risk-adjusted returns.

What are ESG factors?

Environmental, social and governance (ESG) factors are a set of metrics - not always systematically reported in the past - that can affect the performance of companies and other security issuers.

Environmental

Issues related to the quality and functioning of the natural environment and natural systems.

Examples

Examples include; Air, noise, water & light pollution, water, carbon & energy intensity, Greenhouse gas emissions, natural disaster/catastrophe resilience, climate change resilience, site contamination, biodiversity/habitat protection, invasive species, heat & waste generation, waste management, microclimatic impact, resource efficiency/management etc.

Social

Issues related to the rights, wellbeing and interests of people and communities.

Examples

Examples include; Workplace safety, working conditions, employee healtth, societal value creation, local stakeholder engagement/relationship, social responsibility, sustainable community investment, effective communication, human rights, child labour ban, customer satisfaction, data protection/privacy, discrimination prevention, freedom of association, forced labour ban, community health and safety, material sourcing, emergency preparedness etc.

Governance

Issues related to the way companies are managed and overseen.

Examples

Eaxamples include; Audit committee independence, compensation committee independence, fiduciary duty, independence of chair/board, board diversity, whistle-blower protection, political contribution, one share/one vote, fraud, lobbying activities, bribery and corruption, executive compensation, legislative compliance, transparency & disclosure, stakeholder engagement, money laundering, terrorism, code of conduct etc.

ESG integration matters

Our belief that ESG integration can help us build stronger portfolios for our clients is supported by a large and growing body of evidence. Sustainable business practices are no longer optional for companies, but are becoming necessary to keep them from falling behind.

89% of empirical studies find a positive link between ESG factors and the financial performance of companies.

Evaluating ESG integration

ESG factors are integrated into each investment process in a manner consistent with the underlying investment style. However, the Sustainable Investing team use the same 10-point framework and assessment process to evaluate integration across strategies.

Metrics

  1. Research analyst/ investment due diligence
  2. Consideration at portfolio management / investment decision level
  3. Breadth of third-party ESG data
  4. Level of proprietary research conducted
  5. Company / Sector coverage
  6. Documentation of integration methodology
  7. Documentation of proprietary data and research methods
  8. Risk management and oversight
  9. Systemisation
  10. Ongoing monitoring and maintenance

Investment Stewardship

Investment-led, expert-driven

Our heritage and responsibility

For more than 10 years, we have been creating value for our clients by considering the impact of every decision we make. As one of the world’s largest allocators of client capital, we recognize our accountability to society as a whole.

In our role as a large, active manager, we are already seeing improvements in the companies with which we engage. Not only do we think they will perform better financially over the long term, but they will also contribute to a more positive, forward-looking and equal society.

Governance

Strategy alignment

Human capital

Climate risk

Stakeholder engagement

Voting responsibly and engaging for change

Our stewardship activities are based on proprietary environmental, social and governance (ESG) research by our investment desks and Sustainable Investing Team.

Our investment stewardship specialists play a key role in ensuring consistent, high-quality dialogue with the companies in which we invest and guide our voting decisions, in collaboration with our portfolio managers and sector or credit analysts.

300+ dedicated
ESG engagement meetings

Each year

Voted at ~800 shareholder meetings
in 40 markets globally

In 2020

Sustainable Investing Capabilities

Research-fuelled sustainable solutions

Aligning investments with values

In a fast-changing world, sustainability is a growing concern for our clients. Many investors have twin goals: to generate returns, and to do so in a way that aligns with their values.

We are committed to incorporating the management of risks associated with environmental, social and governance (ESG) factors across our entire investment platform. For investors who want to express their values explicitly in their portfolios, we offer a broad range of sustainable investment capabilities.

Sustainable investment capabilities for specific client goals

Our sustainable investment capabilities are designed to align with your financial and non-financial goals. We offer a spectrum of approaches, from screening out companies in specific industries to investing with the primary goal of achieving environmental or social benefits.

Exclusions

Excludes certain sectors, industries or practices from the portfolio based on specific ESG criteria.

Positive tilt

Tilted towards sectors, companies or projects with positive ESG characteristics; excludes certain companies based on ESG criteria.

Best-in-Class

Invests in companies that lead their peer groups in ESG performance; excludes certain companies based on ESG criteria.

Thematic

Invests in themes or assets specifically related to sustainability, with a top-down approach.

Impact

Invests with the primary goal of achieving specific, positive environmental/social benefits while also delivering a financial return.

Climate Change

The time to act is now

Climate change is a global challenge that we cannot afford to ignore. Momentum is growing for ambitious carbon transition policies that will create winners and losers across companies, sectors and markets. For investors, the time to act is now.

At Energy Spas Asset Management, we have made significant investments in our climate-related investment capabilities and enhanced our efforts to help clients consider the material implications of climate change within their portfolios. We became a signatory to the Net Zero Asset Managers initiative in 2021, and are committed to working with our industry to promote action on climate change.

Achieving Net Zero: The path to a carbon-neutral world

Governments are aligning behind the goal of achieving net zero emissions by 2050, but dramatic changes to the global economy will be required to get us there. Learn more about the policies and innovations that could pave the way to a carbon-neutral world.

Why climate change matters to investors

Climate change is already transforming the investment landscape. The physical risks are becoming realities, regulatory pressures are growing, new technologies are replacing old and consumer behaviors are shifting.

By reflecting the transition in portfolios now, we believe investors will be better placed to manage the risks, capture the opportunities and contribute to the solution.