Sustainability considerations continue to affect markets and economies in new ways. We believe a focus on sustainability gives investors and the companies and issuers they invest in greater power to drive value and create strategic advantages.
Seeking better outcomes through unique perspectives
To help mitigate risk and enhance potential returns
To translate sustainability research into client-oriented outcomes
To open avenues to value creation by advancing resilient business practices and sustainable outcomes
* Represents meetings with public-market issuers. Issuers refers to companies and sovereigns. All figures as of 31 December 2023. For the Wellington Management group of companies.
To engage with policymakers and standard setters to improve client outcomes
Sustainable investing and ESG solutions
Socially and environmentally positive themes underpinned by structural economic drivers are central to the investment philosophy in pursuit of value creation and/or risk management.
Seeks to invest in issuers that we believe contribute to a lower-carbon future, can help the world adapt to a changing climate, or are well positioned to manage transition and/or physical risks
Seeks to invest in issuers whose core products, services, or projects provide environmental and/or social solutions in a differentiated way, with the goal of driving measurable positive impact alongside financial returns
Sustainable investing and ESG funds
Get an in-depth view of our impact, climate, stewardship, and sustainable theme funds.
Stewardship and ESG integration
We see material ESG issues as strategic business issues that may affect the long-term value of the assets in which we invest. When issuers improve on ESG areas that could affect investment outcomes, we believe our clients should benefit.
Climate leadership
Collaborations with leading climate-science organizations Woodwell Climate Research Center and the MIT Joint Program on the Science and Policy of Global Change can inform our investment approaches and decision making. They also help support the Wellington Climate Leadership Coalition.
Meet our sustainable and esg investing experts
Wendy Cromwell
, CFA
Christopher Goolgasian
, CFA, CPA, CAIA
Oyin Oduya
, CFA
Hillary Flynn
Yolanda Courtines
, CFA
Insights
Green horizons: How the shift toward sustainable finance may reshape fixed income markets
Three sustainability trends have the potential to reshape fixed income markets, leading to a range of new opportunities for investors.
Understanding the climate opportunity in alternatives
Portfolio Manager Alan Hsu highlights the potential inefficiencies created by traditional long-only climate strategies.
Physical climate risks: Implications for investors
Director of Climate Research Chris Goolgasian and Woodwell Climate Scientist Zach Zobel discuss how investors might use climate science as an input for financial decision-making.
Impact measurement and management: addressing key challenges
Our IMM practice leader describes common impact investing challenges and suggests ways to overcome them.
URL References
Related Insights
FAQs: Sustainable investing
ESG refers to the environmental, social, and governance standards that investors and other stakeholders can use to evaluate a company’s or issuer’s behavior and practices. Environmental (E) issues can include how a company or issuer recycles, manages water usage, lowers CO2 emissions, or disposes of waste. Social (S) issues comprise how a company manages relationships with employees, customers, vendors and suppliers, and the local community. Governance (G) issues can include board and leadership integrity, capital allocation, and executive compensation.
Sustainable investing seeks to generate positive financial returns alongside positive social and environmental outcomes. There are several sub-categories of SI, including impact, climate, ESG integration, and sustainable theme, among others. Sustainable investing can be done in public or private markets, and across equity, fixed income, and alternative asset classes.
Wellington’s sustainable and ESG investment approaches are all nonconcessionary, meaning the investment teams intend to deliver competitive investment returns — relative to benchmarks and peers — by leveraging their stated ESG or sustainable investing philosophy and process.
As with any relatively new market category, timely and transparent information, standardized disclosure and reporting, and consistent rating methodologies are important. Investors must be able to reasonably evaluate the sustainability of the assets in which they invest. In addition, some regions have been slow to embrace this category amid social, macro, or political headwinds. Reaching stated sustainability objectives may prove challenging for some companies and/or investors. Finally, the regulatory environment for sustainable investing, particularly regarding climate change, continues to evolve. Standards around business and investment practices are being developed but local inconsistencies remain.
Stewardship investing is a sustainable investing strategy focused on companies with industry-leading or markedly improving ESG practices. This type of investing generally seeks companies with strong commitments to sustainability, social responsibility, and ethical governance as pathways to increasing returns on capital. Wellington formerly referred to this approach as “ESG forefront investing.”
Impact investing seeks to use investment capital to generate competitive financial returns alongside positive outcomes for large-scale social or environmental challenges. For example, impact investment opportunities can be found in areas such as affordable housing, health care, education, financial inclusion, and renewable energy.
Climate investing is an increasingly broad category that can include investments in companies and other issuers that are actively developing solutions that help society adapt to or mitigate the effects of climate change. Climate-aware investing can also include the avoidance or underweighting of issuers or industries that may be unprepared for or heavily exposed to climate-related risks. Climate investors may seek to engage in constructive dialogue with issuers to help them build awareness of (and reduce) their climate-risk exposure.
The focus of sustainable theme investing is to address sustainability challenges through a specific thematic lens in pursuit of value creation and/or risk management. These investors aim, first, to identify socially and environmentally positive themes underpinned by structural economic drivers, and second, to invest in the drivers or beneficiaries of those trends.
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