ENVIRONMENTAL, SOCIAL AND GOVERNANCE INVESTING
Integrating sustainability into our investment DNA to drive long-term value creation
Our Approach
We believe that integrating ESG factors into our investment process enhances risk-adjusted returns and creates sustainable value
OUR COMMITMENT TO ESG INTEGRATION
Individual research analysts and portfolio managers are responsible for implementing ESG integration in their portfolios and investment research. We believe this bottom-up approach encourages strategy-specific innovation while allowing each portfolio management team to learn from best practices across the investment platform. Our ESG Investing team accelerates this process with top-down expertise and support.
Tricore Wealth's Environmental, Social and Governance Integration Framework
Our ESG-integrated strategies select an approach from our ESG Integration Framework of Avoid, Assess, Amplify or Aim for Impact, depending on various factors such as the objectives of the strategy, asset class and investment time horizon.
Avoid
Excluding companies or industries that don't meet our minimum ESG standards
Assess
Systematically evaluating ESG risks and opportunities in our investment analysis
Amplify
Engaging with companies to improve their ESG practices and disclosures
Aim for Impact
Investing in solutions that directly address environmental or social challenges
PROPRIETARY ESG ANALYSIS AND RATINGS
At Tricore Wealth our research analysts have worked closely with our in-house ESG Investing team to rate corporations on material ESG metrics at the industry level. Core to development of this proprietary ESG ratings system has been our ability to marry the specialized sector expertise of our analysts with our dedicated internal ESG investing team's perspective on complex ESG data sets.
Assessment of Environmental and Social Factors
A cohesive three-part method
Industry-Specific Assessment
Conduct material factors analysis using Sustainability Accounting Standards Board (SASB) as a starting point, but adding expert analyst judgement
Broad Range of Sources
Combines company-reported, specialized data and third-party research used to measure performance against these factors
Active Engagement
Engaging with company management provides additional qualitative insight for analysts to overlay quantitative assessment
Enablers of Success
Accelerating impact across our Corporate Sustainability and Responsible Investment activities requires a multi-year focus on the foundational elements of a robust and vibrant ESG program:
1) Embedding ESG into our culture
by activating our global employee base to shape our priorities and drive implementation
Embedding ESG into Our Culture
After creating a distributed resource model of 120+ ESG champions across our investment strategies and corporate functions in 2020, we began to add dedicated ESG specialists by line of business. We believe a combination of the two — ESG specialists partnering with homegrown ESG champions — is the best way to integrate ESG within each team's culture.
2) Increasing transparency through data
by translating our qualitative objectives into more quantitative goals
Increasing Transparency Through Data
While 2020 was a year for defining the data collection needs for each ESG integration plan, 2021 was the year of more systematic collection and analysis of that data. Throughout this report you will see more data across both our Corporate Sustainability and Responsible Investment sections, an effort that we plan to expand in future reports.
3) Expanding our spheres of influence
through external partnerships and collaborative cross-industry problem solving
Engaging with Like-Minded Partners to Move Our Industry Forward
Just as we focus on accelerating the impact we can achieve directly, we know that longer-lasting systemic change will only happen through partnering with other like-minded firms, shareholders, limited partners, industry associations, and non-profits, among others. In 2021 we launched industry initiatives with traditional competitors and supported other programs that we feel have the potential to transform ESG practices across private markets.
While the specific activities under these headings may change from year to year their role as key enablers of sustained impact will not.
Responsible Investment
How we scale our sustainability practices throughout our investment platform
Mobilizing an entire investment platform to act on a clear ESG vision requires a deliberate approach to governance.
In 2020, we explicitly laid out our thinking on ESG governance by clarifying the respective roles of our Board of Directors, Executive Management Committee, ESG Team, the groups of ESG Champions embedded in each investment strategy as well as the front-line investment and portfolio management professionals. Through this model, we collaborate firm-wide to tailor our ESG strategy to each investment group and drive ownership and accountability across the platform.
Oversight Responsibilities
- Board of Directors
- Executive Management Committee
Define Implementation
- ESG Team
- ESG Champions
Drive Implementation
Investment and portfolio management professionals across all strategies
Corporate Sustainability
How we lead by example through our own corporate operations
Climate Change
We are committed to leading by example on climate change through our own corporate practices.
Diversity, Equity and Inclusion
We embrace our differences and offer a multitude of programs and policies that support our diverse workforce and enrich our work environment.
Philanthropy
We partner with charitable organizations to make an impact in our communities.