Responsible Investing

The Benefits of a Systematic Approach

Objectivity - It is well known that there is a relatively low correlation across the major data vendors’ ESG ratings highlighting subjectivity and measurement error. A systematic approach based upon empirical evidence overcomes these concerns.

Proprietary signals - Our investment team includes experts in machine learning, data science techniques, and alternative data to create forward-looking material ESG signals. We do not use ‘off-the-shelf’ scores within our investment process.

Financial materiality - We pay careful attention to the formulation of ESG signals across sectors, regions, and time based upon their efficacy.

Disciplined investment decisions - A key strength of our process is the ability to weigh the relative importance of ESG metrics alongside company fundamentals.

Proprietary and data-driven ESG signals built from unstructured data and machine learning to enhance the prediction of risk-adjusted returns

Ability to integrate sustainability preferences (exclusions, tilts, decarbonisation) typically with negligible or measured impact on alpha exposure

Engagements playing to the strength of data analysis and sophisticated quantitative insights

Stewardship

Engagement aligns with our investment conviction themes and is further informed by escalating ESG controversies and thematic responsible investing trends.

Acadian is a Principles for Responsible Investment (PRI) signatory. Click here for our 2021 Summary Scorecard.
Acadian has signed on to the Net Zero Asset Managers initiative, Climate Action 100+ and is a supporter of TCFD.
Acadian Asset Management (UK) Limited’s Commitment to the UK Stewardship Code
Shareholder Rights Directive (SRD II)

Acadian is a member of the Investor Alliance for Human Rights and Investors Against Slavery & Trafficking.
We are an active member of ESG Research Australia (Acadian Australia) and have been recognized as a Responsible Investment Leader 2022 by the Responsible Investment Association of Australasia.

A systematic approach to engagement

We consider utilities’ impact on the carbon intensity of global benchmarks. In more recent periods, low volatility managers have looked to other, more effective diversifiers to reduce portfolio risk. However, as the outlook for utilities improves and investor demand returns, decarbonization efforts will require prudent deliberation and sophisticated methods to balance decarbonization priorities and risk-reward objectives. Link below for the full piece.

We highlight potential environmental policy changes in the U.S. under a Biden administration. Given the uncertainty that remains, particularly with yet-to-be-resolved Congressional leadership, we also discuss the importance of a nuanced and dynamic approach to incorporating the impact of environmental policy change when it occurs.

We believe that certain ESG considerations influence corporate success and investment performance, but amid relentless hype and pressure to participate, many approaches have been brought to market that are based on imprecise foundations and rudimentary implementations.

RIAA Leader 2022

To view our Responsible Investing Statement, please click here.
To view our Modern Slavery Statement, please click here.

The Benefits of a Systematic Approach