While it is usually the day to day volatility of the stock market that attracts the attention of the media and many investors, the events that lead to these types of daily moves are rarely remembered in a few weeks or months. What is important to the disciplined investor is to be able to block out the short term noise and focus on the long term factors that will lead to the success of a corporation. To quote Warren Buffett, “In times such as these, a company must invest in the key ingredients of profitability: its people, communities and the environment."

Sustainable investing is a strategy that considers the intangible attributes of a corporation, such as its Environmental, Social and Governance (ESG) characteristics, before making a decision to buy or sell its stock. In addition to the social benefit of investing in corporations with a strong ESG profile, there is an expectation that these companies will outperform over time due to their focus on the long term plan for their business. By having a focus on ESG factors, it is hoped that a corporation will be well prepared to deal with the longer term challenges to their business that may come through changes to regulations and customer demands, as well as being able to identify future opportunities at an earlier stage than their competitors.

In the attached article, “Sustainable Competitive Advantage through ESG Integration,” our Global Manager Research Team makes the case that including ESG considerations as part of an investment process can both reduce risk and improve returns. I hope you have a few minutes to read through the article, and if you have any questions please give me a call or send me an email.

Take Care,

Mike