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GIB Global ESG-Plus Equity Strategy

Overview

Environmental, Social and Governance (ESG) integration is vital to gauge the long-term financial health of companies. Research suggests that exposure to companies with high ESG credentials provides greater long-term risk-adjusted returns and superior sustainability impacts*.

A robust ESG investment strategy requires a thorough understanding of data, the underlying securities and what constitutes good ESG credentials. We address this by deconstructing ESG data, overlaid by our consistent, sustainable investment framework. This allows us to create customisable and dynamic rules-based Global Equity portfolios tailored to our clients’ needs.

*Ashwin Kumar et al (2016). ESG factors and risk-adjusted-performance: a new quantitative model.

Characteristics

1

Robust rules-based strategy aiming for higher risk-adjusted returns and ESG impact

2

Dynamic ESG scores allow quick identification of high potential companies

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Maximum exposure to top ESG-rated companies and best improvers

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Exclusion of companies with controversies and prohibited activities in line with the GIB AM Responsible Investment Policy

5

Active ownership of assets with proxy voting

Approach

Aim

Our Global ESG-Plus Equity strategy is designed for institutional investors looking to leave a positive imprint as well as performance. The strategy aims to provide superior long-term returns with improved sustainability metrics compared to traditional equity indices.

Strategy overview

We initially apply negative screening to a global developed market equity investment universe to take account of controversies, and exclusions. Our proprietary model then derives an ESG score for each company. This process aims to lower the risk of potential controversial events and the likely subsequent impact on reputation and share price.

Companies are included in the portfolio if they demonstrate a high GIB ESG score relative to the whole investable universe, or an improving score over a defined period, which we believe is a leading indicator of company performance.

We are active equity owners and through Proxy voting, we believe, we can increase the potential for long-term value realisation

Methodology

Our proprietary data-driven ESG scoring solution combines thousands of distinctive firm-level data points. Central to our analysis is the application of our proprietary financial materiality mapping that provides us with a clear picture of the metrics that are material to companies across different industries. This provides dynamic and transparent company ESG scores, creating a multi-faceted approach to examining data. Learn more about our ESG methodology here.

Customisation

Our proprietary ESG capability and expertise allows us to tailor the strategy to represent our clients’ investment and sustainability objectives through tailored exclusions, Shariah investment considerations, targeted ESG impact, or thematic tilts.



Portfolio characteristics

1

80% of the portfolio allocated to ESG leaders.

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20% of the portfolio allocated to ESG improvers.

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Continuous monitoring for material ESG controversies.

4

Higher ESG impact relative to traditional equity indices.

5

Proxy voting and engagement with the companies we invest in.

Our philosophy is to enable clients to focus their ESG investments in areas that matter to them.

To discuss how this strategy can fit within your overall portfolio, please contact our solutions team

T: +44 (0) 20 7259 3149
E: solutions@gibam.com