Environmental issues that matter include carbon emission, resource efficiency, waste management, pollution control, deforestation and biodiversity. We also consider social factors like modern slavery in supply chains, workplace safety, employee relations, and diversity and inclusion. Governance practices matter, too: all of our teams evaluate issues around bribery & corruption, executive pay, board structure and diversity, tax strategies, and internal controls and risk management. We want to see issuers aligned with stakeholders on E, S and G, and the people who are best-equipped to evaluate issuers’ ESG behaviors and practices are AB’s investment teams.
Chris Hogbin: Our investment teams don’t tackle ESG alone. They work closely with our Responsibility team. These experts provide leadership in creating ESG frameworks and defining methodologies. They partner with our analysts in the research process. And they help conduct engagements with companies. The investment industry should be well past the point where ESG issues are considered separately from “traditional” return considerations. These issues need to be considered together and on a forward-looking basis. That’s what makes our investment teams’ partnerships with the Responsibility team so complementary—and so important.
Michelle Dunstan: We have developed proprietary tools, including ESIGHT, our ESG research and engagement platform. These tools are critical to scaling our ESG insights across the firm. AB runs many portfolios across many investment teams, so sharing our proprietary ESG research and details of individual team engagements with issuers is critical. By staying connected, we can create strong research synergies and speak to issuers with a unified, impactful voice. With ESIGHT as the hub for all of our ESG research and engagement insights, we’re able to incorporate our best thinking into investment decisions.
Scott DiMaggio: The process of integrating ESG across all actively managed strategies is governed by AB’s senior leadership and driven by the firm’s investment teams, in collaboration with our Responsibility team. ESG integration is supported by a robust infrastructure that includes proprietary tools, training and strategic partnerships. To learn more about the many ESG tools and processes we deploy at AB, please continue watching the next videos in this series.