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ESG integration in SMID equities

Insight
23 May 2019 |
Active ESG
Environmental, social and governance (ESG) analysis is firmly encoded in our investment DNA. To understand how these risks influence the performance of small- and mid-cap companies, which are not as extensively covered by ESG researchers as large companies, we do not rely on external data. We go to the source, meeting with corporate boards and management teams to develop a fuller picture of a company’s governance and management of environmental and social risks.
The disparity between larger and smaller companies regarding the disclosure of basic environmental, social and governance (ESG) metrics, or the implementation of ESG risk-management practices, is striking. Given the lack of readily available ESG information in the small- and mid-cap sector, active managers with the right tools to perform ESG analysis on these companies can generate profitable insights. In our view, investors won’t find those tools on the shelf, because engagement is necessary to uncover the right information and gain a more accurate picture of the ESG performance of companies.

Go to the source: ESG integration in small- and mid-cap equity investing

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Risk profile

  • Past performance is not a reliable indicator of future results.

  • Investing in smaller/medium sized companies may carry higher risks than investing in larger companies.

  • Investments in emerging markets tend to be more volatile than those in mature markets and the value of an investment can move sharply down or up.

  • This information does not constitute a solicitation or offer to any person to buy or sell any related securities or financial instruments.

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