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ESG Investment Process

The Ethical Funds mantra of “making money while making a difference” is guided by a firm belief that companies integrating the best environmental social and governance (ESG) practices will provide higher risk-adjusted returns to shareholders and contribute to the creation of long-term sustainable value for all stakeholders. Our proprietary ESG process consists of:

    Financial AnalysisFinancial Analysis: Our independent portfolio managers begin by assessing companies through traditional financial analysis to identify the best investment opportunities.

    ESG AnalysisESG Analysis: Our proprietary evaluation process adds an extra layer of due diligence, identifying often overlooked risks.

    • Identify sector-specific material ESG risks to establish baseline expectations for companies.
    • Exclude companies involved in activities that are not consistent with accepted norms and values (tobacco, nuclear) or that violate international treaties (weapons banned under international humanitarian law).
    • Evaluate every company to ensure that it satisfies our baseline expectations.

    Portfolio ConstructionPortfolio Construction: We build our portfolios with companies that fulfill both financial and ESG objectives.

    Monitoring and InvestigationMonitoring and Investigation: We continuously monitor all portfolio companies for headline risk. If a company has potentially committed a significant transgression of management ethics or responsible practices, we conduct a management breach investigation and take appropriate action.

    Corporate EngagementCorporate Engagement: As shareholders, we then actively engage with many of the companies held in our funds to improve their ESG practices through dialogue, shareholder resolutions and proxy voting.