ESG Investing

Through our independent and specialized investment teams, Wells Capital Management (WellsCap) brings together a strategic balance of investment capabilities to serve the investment needs of our clients worldwide: institutions, intermediaries, and individuals. We understand Environmental, Social, and Governance (ESG) issues are important considerations among many that should be incorporated by our investment teams within their evaluation and decision-making processes. We believe that ESG issues can have an impact on investment performance and have financial consequences; likewise, we believe that a better understanding of ESG risk factors can help protect against downside risk and contribute to long term risk-adjusted returns. As such, WellsCap integrates ESG research into our overall fundamental analysis.

We believe understanding the potential impact arising from ESG issues is an essential step to better understanding investment outcomes in a rapidly changing world. Changing consumer preferences, increasing costs from externalities (such as resource use or climate change), and the emerging regulations addressing these issues are increasingly changing behavior of the markets we operate in. With our strong foundation in active management and over 500 investment professionals contributing deep research capabilities and investment expertise, we are well placed to identify and analyze material ESG issues. By considering ESG as an important element of investment performance, we are able to consider a broad range of relevant risk factors and generate returns as the market increasingly reacts, while aligning our investment outlook and strategies to the new norms of a changing world.

We also understand that incorporating ESG can help align investment strategies with a broad range of diverse values. Ultimately, our focus is on delivering investment outcomes that meet our clients' needs, including alignment with the priorities and values that matter most to them. Our specific approach to ESG is therefore differentiated and determined by the unique requirements of each client; we believe in providing holistic ESG investment solutions and our objective is to provide the tailored solutions that provide alignment with values, meet financial goals, and generate positive investment outcomes.

We believe ESG investing is investing in a better future.

Our Commitments and Membership

In relation to industry initiatives, our approach to ESG places a large amount of value on understanding best practices and contributing our expertise to developing evolving standards around ESG. We are developing close partnerships with leading industry associations, disclosures and standards bodies, and non-profit organizations to help lead and drive the latest approaches to the integration of ESG in financial strategies and processes.

This includes:

  1. Principles for Responsible Investment. In 2015, WellsCap became a signatory of the Principles for Responsible Investment (PRI), where we have committed to implementing six Principles related to the integration of ESG. Beyond our commitment to integrating ESG and publicly reporting on our progress, we are actively contributing to the work of the PRI to help investment professionals across the industry increase their sophistication to ESG. Examples of this include contributing our investment expertise through our involvement in the PRI Fixed Income Advisory Committee and broadening our collaborative efforts by working with the PRI to bring together investment professionals to discuss and learn from the latest industry trends in events.
  2. Sustainability Accounting Standards Board. The Sustainability Accounting Standards Board (SASB) is an organization dedicated to supporting the disclosure of material sustainability information across sectors in a decision-useful way. At SASB we are represented on both the Standards Board (accountable for the due process, outcomes, and ratification of the standards) and the Investor Advisory Group (comprising of leading asset owners and asset managers who are committed to improving the quality and comparability of sustainability-related disclosure to investors). Furthermore, we have contributed the expertise of our investment professionals across the development of the standards themselves.
  3. Japan's Stewardship Code. WellsCap has been a signatory to Japan's Stewardship Code since February 2017. Also known as Principles for Responsible Institutional Investors, the goal of the code is to promote sustainable growth of companies through investment and dialogue. The firm is fully committed to supporting each of the principles of the Japan Stewardship Code.
  4. Ceres. We are Investor Network Members at Ceres, a sustainability nonprofit working with influential investors and companies to tackle the world's biggest sustainability challenges, including climate change, water scarcity and pollution, and human rights abuses.
  5. CDP. We are investor signatories to CDP (formerly known as the Carbon Disclosure Project). The CDP runs a global disclosure system and have built the most comprehensive collection of self-reported environmental data in the world.

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