Our Approach to ESG Investing

The number of institutional investors incorporating environmental, social, and governance (ESG) factors into investment decisions continues to rise—and Callan is at the forefront of the research and education concerning ESG investing.

Callan Becomes a Signatory of the UN-Supported Principles for Responsible Investment (PRI)

It starts with collaboration and customization.

Our approach to ESG investing is consistent with our broader consulting philosophy: Customized solutions are required to meet each institutional investor’s needs. We work with you to understand your investment objectives and to establish a sound fiduciary process for decision-making. In our experience, the definitions of ESG vary widely across organizations, depending on values and priorities. Implementation can take many forms, including factor integration into investment analysis, negative screens, themed strategies, carbon footprinting, and shareholder activism, which makes customization essential. Recent client projects related to ESG include:

  • Hosting workshops and webinars for investment managers and plan sponsors
  • Creating and monitoring an emerging market permissible country screen
  • Conducting manager searches in active and passive equities
  • Leading discussions on carbon footprinting and fossil fuel divestment, firearms/ammunition, tobacco, and Sudan.

It continues with education and research.

Our ongoing research and education focuses on the impact on returns and risk mitigation from incorporating ESG factors. Specifically, we:

  • Integrated MSCI’s ESG Ratings scores into our in-house database to enable security-, portfolio-, and manager-level assessment of total scores and sub-scores (E, S, and G separately).
  • Collect and analyze data on managers’ usage of ESG and SRI factors in the investment process and hold face-to-face manager meetings to understand the nuanced application of ESG integration into investment processes.
  • Participate in industry events (e.g., CFA Institute, Institutional Investor, Ceres, Investor Network of Climate Risk, etc.) to contribute to ongoing education and ensure we are on top of the latest trends.

Also, our ESG Committee meets regularly to address relevant new issues in the space and communicates industry findings with clients and colleagues.

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ESG Survey: Adoption Doubles in Six Years

Our sixth annual ESG Survey reveals that 43% of U.S. institutional investors incorporated environmental, social and governance (ESG) factors into their investment decisions in 2018. The percentage is the highest recorded in the survey’s history—and nearly doubled since its launch in 2013. Explore the key findings…

43%

U.S. Institutional Investors

Incorporated ESG factors in 2018

22%

U.S. Institutional Investors

Incorporated ESG factors in 2013

64%

U.S. Foundations

Reported Highest Rate of ESG Adoption

Would you like to talk to us? Call our San Francisco headquarters, 415-974-5060.