Integrating ESG

The integration of Environmental, Social, and Governance (ESG) considerations into the investment cycle has become a strategic priority for asset managers.

Institutional investors and regulators expect asset managers to start incorporating ESG factors into their investment decisions. Asset managers without a formalized ESG program are moving quickly to adopt policies, management systems, and reporting tools to meet industry expectations. Asset managers who have already developed an ESG program need to update their efforts to match evolving regulation and best practices.

There is growing recognition among portfolio managers of the link between ESG practices and higher returns, so it is important that their  investment analysis incorporates ESG.

These are examples of how ESG benefits a company’s profitability:

• Avoid fines, litigations, or reputation issues
• Attract talent and boost employee’s productivity
• Comply with regulatory requirements
• Better balance between risks and return
• Access new investors or markets
• Lower a company’s cost of capital

Using a combination of industry standards and management-driven KPIs, we identify ESG factors that are financially material and develop an ESG program tailored to your investment strategy.

Preliminary Analysis

• Where do I start?
  
• How do I integrate ESG topics in the investment process?
• Is my current ESG policy aligned with industry standards?

Evaluation & Rating

• How do I measure my ESG performance?
• Can you help investigate material ESG issues?
• Can you help us improve our ESG rating?

Disclosure Report

• How do I report my ESG performance?
• How do I assess my business in terms of impact?
• How do I transform my business to meet sustainability goals?

ESG metrics your investors can trust.

There are a multitude of reporting frameworks that deal with sustainability. We view ESG metrics in the context of your organization’s business, activities, and stakeholders and help you design an ESG reporting strategy consistent with your corporate values, your portfolio objectives, and investors’ expectations.

No matter where you are on your ESG journey, our systematic approach will show how to incorporate non-traditional but financially material factors into traditional financial analysis and use ESG data to reduce risk and enhance long-term value.

We are experienced professionals with a hands-on approach and a service-oriented philosophy who believe in using common sense and open communication to promote a sustainable future.

SUSTAINABILITY & THE NEW SOCIAL CONTRACT

The notion of “social contract” is at the foundation of our liberal democracies: individuals contribute through taxes, and in return the government provides protection through military defense, law enforcement and the justice system, as well as essential services such as healthcare and infrastructure.

In recent times, as governments have struggled to address pressing global challenges such as climate change, poverty, and inequality, an increasing worry regarding the erosion of the social contract has emerged.

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THE FORGOTTEN FACTOR
DRIVING THE RISE OF SUSTAINABLE INVESTING 

The intersection between sustainability and investing is driving systemic change in the capital markets. Bloomberg estimates that ESG investing (investment strategies considering Environmental, Social and Governance factors, in addition to financial factors) will represent a third of global assets under management by 2025.

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Pinnacle ESG Brochure