The Impact of ESG Criteria on Financial Performance
By evaluating companies on the basis of strict Environmental, Social and Governance (ESG) criteria, we derive added insight that we believe can influence the performance of their stocks either positively or negatively.
- Resource management and pollution prevention
- Climate change/emissions reduction
- Environmental reporting/disclosure
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Workplace
- Diversity
- Health and safety
- Labor-Management relations
- Human rights
Product Integrity
- Safety
- Product quality
- Emerging technology issues
Community Impact
- Community relations
- Responsible lending
- Corporate philanthropy
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- Executive compensation
- Reporting and disclosure
- Board structure and accountability
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- Avoid or minimize environmental liabilities
- Lower costs/increase profitability through energy and other efficiencies
- Reduce regulatory, litigation and reputational risk
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Workplace
- Improved productivity and morale
- Reduce turnover and absenteeism
- Openness to new ideas and innovation
- Reduce potential for litigation and reputational risk
Product Integrity
- Create brand loyalty
- Improve product safety and excellence
- Reduce potential for litigation
- Reduce reputational risk
Community Impact
- Improve brand loyalty
- Protect license to operate
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- Align interests of shareowners and management
- Avoid unpleasant financial surprises or “blow-ups”
- Reduce reputational risk
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