Reflecting its importance, we don’t delegate our ESG integration analysis to a separate team. It is the responsibility of our Research team to understand a company’s material ESG risks and opportunities. The team does this through the consistent application of an investment process that has been tried and tested over decades.
When we research any company, we apply the same analytical framework. Our ESG analysis is an integral part of this framework and is tailored to consider the material risks and opportunities relevant to each company.
This analysis covers four key areas:
Environmental Considerations
What is the impact of a company’s activities on its wider environment and how does it approach its environmental considerations?
Human and Social Capital
How does a company approach its people, stakeholders, and wider society? How robust is its social license to operate?
Governance
Does a company adhere to appropriate standards of corporate governance and oversight? To what extent does management discharge its obligations to stakeholders in a fair and responsible manner?
Carbon Risk & Climate Change
What is the impact of a company’s activities on climate change? What is its exposure to the physical and financial risks of climate change and the transition to a low carbon economy?
Task Force on Climate-related Financial Disclosures Entity Report
We have produced our first entity level ‘TCFD’ report, available below, setting out our evolving approach to managing climate and transition related risks and opportunities pertaining to both our own operations and our clients’ portfolios.
Focusing on work undertaken by the firm in 2022, the report is in alignment with the disclosure recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and complies with the relevant FCA ESG Sourcebook requirements.
Product level TCFD disclosures for individual portfolios are also available on demand. Please follow up with your usual Walter Scott client contact if this would be of interest.
RECENT ARTICLES
Our most recent sustainability themed articles from our Research team with additional contributions from industry experts, academics and authors. Further articles can be found on our Insights page.
How to get from A to B in a Global Energy Transition
The complexity of the global energy transition is a significant long-term challenge for investors. At Walter Scott’s recent Research Conference, two guest speakers took a closer look at the reality of the transition and some of the many associated risks and opportunities.
7 minute readFrom pigs to cotton – the rise of the shareholder proposal
Shareholder proposals are a growing feature of proxy voting season. While in many ways we welcome this increased shareholder scrutiny, too often what appears a reasonable objective on paper fails to withstand closer inspection.
7 minute readMaking the Grid Smarter
The electrical grid system has been around for more than a century. Investment Analyst Michael Scott explores how the traditional model is having to adapt to new methods of electricity generation and the transition to net zero.
11 minute readSustainability – evolution not revolution
With sustainability the focus of increasingly heated and polarised discourse, we thought it timely to revisit our approach to the subject. Not with a view to taking sides in this debate, but rather to reiterate the fundamentals of our approach and articulate its philosophical underpinnings. In other words, how we do sustainability and why.
11 minute readGreen Hydrogen – Taking Another Look
Hydrogen has been tipped to play an important role in the global transition to renewable energy. Investment Manager Ashley-Jane Kyle takes another look at hydrogen and assesses recent developments from the perspective of two companies in the industry.
10 minute readIn Conversation with Alan Lander & Tom Miedema
Following the publication of a series of articles and videos around the topic of decarbonisation earlier this year, the project’s chief architects address client questions, particularly around the viability of energy stocks as long-term investments and how we incorporate climate considerations within our analysis.
13 minute watch“We’re fiddling while the forests burn”
Focusing on rising temperature while ignoring our emptying natural habitats makes no sense. An approach that takes the hand of nature while forcing climate change to slow down is the best way forward, says Oliver Balch.
15 minute readThe Journey to a Carbon-Neutral Economy
Today, carbon emissions must be a serious consideration for all investors, particularly those with a long-term perspective. Over the last 18 months, we have been focused on the strategies and technologies that will shape the transition to a lower-carbon economy. Here, we identify how we seek to put this recent work into practice and how it will enhance our analysis going forward.
The New E in ESG
The way companies approach employee wellbeing is a critical test of their culture. Can they come through the current crisis with a strong and more meaningful workplace culture – or will Covid-19 expose it as an empty gesture?
8 minute readLuxury We Can’t Afford?
When a global crisis hits, what does it mean for the likes of Chanel, Ferrari and Louis Vuitton? We find out how the luxury goods sector is faring as the Covid-19 pandemic turns the world upside down.
11 minute readSupply chains trapped as western retailers close their doors
Retailers’ adaption to the Covid-19 crisis is not only impacting their employees but, just as starkly, workers at the end of the supply chain.
9 minute readStandards at the end of the supply chain
Investment Managers Alan Lander and Des Armstrong travelled to Vietnam and Bangladesh to revisit apparel and footwear factories in South-East Asia.
12 minute watch