Integrating ESG: It's just good business
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Environmental, social and corporate governance (ESG) investing has gone from being a tangential topic for investors, to becoming an increasingly important consideration in the decision making process. However, while there is appetite among institutional investors, asset owners and plan sponsors to better integrate ESG into their investment processes, there is also a concern that prioritising ESG factors could interfere with their fiduciary duty.
The RBC Global Equities team has engaged with ESG issues since our investment track record began in 2006. Our experience is that there need not be any conflict between fiduciary duty and accommodating ESG factors and that, in fact, the two are often complimentary. The following paper looks at why this is the case and how we have integrated the consideration of ESG into investment processes. We also share examples of where ESG insights have changed portfolio construction with positive consequences for overall portfolio returns.
