Listen to Roman Ciosek discuss the rise of ESG investing

The Rise of ESG Investing

ESG investing provides a platform for customers to align their personal values with their investment objectives and choose investment disciplines that are meaningful to them.

Environmental, Social, Governance

At Hightower Westchester, we design portfolios with an emphasis on quality investments that help position you for strong financial performance and long-term success.

SRI focuses on the nature or type of business a company conducts, such as avoiding investment in companies that produce or sell addictive substances (like alcohol, gambling, and tobacco) and seeking out companies engaged in social justice, environmental sustainability, and alternative energy/clean technology efforts. While we have been managing SRI mandates for over two decades, the industry has expanded to incorporate what we now call ESG principles.

ESG incorporates the analysis of a company’s financial, environmental, social and governance practices as a means of determining the company’s ability to manage risk and produce strong, long-term investment performance.

Environmental

Looks at a how a company performs as a steward of the natural environment.

Environmental Issues:

• Climate change
• Carbon emissions
• Air and water pollution
• Energy efficiency
• Water scarcity
• Waste management
• Raw material sourcing
• Biodiversity

Social

Examines how a company manages relationships with its employees, suppliers, customers and the communities where it operates.

Social Issues:

• Labor standard
• Supply chain management
• Health and safety
• Human rights
• Data protection/privacy
• Gender diversity
• Employee engagement
• Local community impact

Governance

Deals with a company’s leadership, executive pay, audits and internal controls, and shareholder rights.

Governance Issues:

• Alignment of interests
• Board composition
• Executive compensation
• Lobbying
• Political contributions
• Bribery and corruption
• Business ethics
• Shareholder rights

Evolution of ESG Investing

Investors are increasingly looking for more inclusive/positive screening forms of ESG investing

ESG investing provides a platform for customers to align their personal values with their investment objectives and choose investment products that are meaningful to them. The growing trend of ESG investing could increase flows into companies/funds that score well on ESG metrics, which in turn has the potential to drive stronger performance.

Our criteria for selecting managers within this space exhibit the following characteristics:

  • Strong growth history and trajectory

  • Financial performance (including revenue and risk-adjusted returns)

  • Sustainable, scalable, future-oriented business models

  • Positioning for emerging opportunities

  • Productivity and efficiency

  • Management/corporate governance

  • Risk profile (including regulatory compliance)

  • Environmental performance

  • Community Engagement

  • Corporate culture, workplace policies, and ethical practices

  • Safety, quality, and societal or environmental benefits of products and services

We view ESG standards as integral inputs and value our roles as advocates for ESG standards. Not only do these initiatives promote best practices in the world of publicly traded companies, but they can also deliver tangible benefits to our clients.
Whether you’re an institutional or a private client, we leverage the analysis of both qualitative and quantitative criteria to identify quality companies and investments to enhance your portfolio and help better position you to realize your personal and civic goals.


At Hightower Westchester we are committed to adopting and implementing principles consistent with our fiduciary responsibility.

ESG Fact Sheet

SETTING A HIGHER STANDARD FOR YOU

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