Responsible Asset Owners Global Symposium

View Original

Unique insight or delusion? Capturing characteristics rather than the data.

Targeting portfolio-level ESG outcomes may not require the extensive individual-security research that has become the norm for most socially responsible investments. In this paper, Intech illustrates how to capture ESG characteristics using statistical analysis of ESG ratings to identify persistent and dominant systematic factors that can be applied to a portfolio in non-ESG terms. The result is a reliable, repeatable process that can help overcome many of the challenges typically associated with implementing ESG research.