As at: 30/11/24

Overview

Filters

Fund information

Policy

Alignment with the SDGs is not enough for a company to make it into the portfolio. ESG-integrated fundamental research is critical to evaluating investment candidates. Environmental, social and governance (“ESG”) considerations are integrated into the Investment Manager’s research and investment processes through the AB Stewardship Approach. The Investment Manager’s research analysts are experts in the specific industries and the companies and issuers they cover. Using their own proprietary research, third-party research and findings from other sources incorporated in the Investment Manager’s research collaboration platform, they analyse firms’ and issuers’ ESG practices to identify potentially material ESG factors that can vary company by company and issuer by issuer.

ESG considerations are incorporated into the Investment Manager’s research and investment process and are one of several considerations for making investment decisions. After consideration of all ESG factors including those that could negatively impact a security of issuers or companies, the Investment Manager may still purchase the security and/or retain it in the Portfolio. ESG considerations may not be applicable to all types of instruments or investments. Analysts also may monitor and engage with companies and issuers in which the Investment Manager invests or intends to invest.

Process

Resources, Affiliations & Corporate Strategies

AB equips its investment managers   with frameworks, tools and training to enable them to adequately understand, research and integrate material ESG and climate issues. These include:

• Proprietary platforms. To augment third-party data and tool sets, we’ve developed proprietary research and collaboration tools to strengthen ESG and climate research and systematize integration across the firm–including our ESIGHT platform for research and collaboration and PRISM for credit ratings and scoring. We’ve also created an Alternative Data Dashboard that combines the industry-specific knowledge of our fundamental analysts with the capabilities of our Data Science Team to create better insights from alternative data and our research.
• Third-party data and research. All investment managers have access to a range of data services that enable them to gain a broad understanding of the ESG and climate risk characteristics of an issuer, a sector or a portfolio. These include but are not limited to ESG data from Bloomberg and FactSet, MSCI ESG Ratings, Carbon Delta and MSCI Carbon Emissions data, Sustainalytics Risk Ratings, Global Norms and Controversies analysis, ISS-Ethix Controversial Weapons Analysis, and ISS and Glass-Lewis corporate governance and proxy research. We view these third-party data sources as a starting point for analysis; on their own, they don’t provide the level of detail or insight necessary to fully understand the risks and opportunities inherent in an issuer or portfolio. Our Responsible Investing Team continually evaluates our current slate of providers and new providers to ensure that we’re providing our investment managers with the best possible data and information.
• Strategic partnerships with world-class institutions. AB has collaborated on climate change with the Earth Institute at Columbia University. Phase One of our collaboration involved the joint development of a Climate Science and Portfolio Risk curriculum that addresses the science, regulatory, legal and public policy aspects of climate change as well as how to integrate climate change into company and issuer financial analysis. Over 250 of AB’s investment staff have taken the training. Phase Two will involve joint research with the scientists on an array of climate-change topics.
• Extensive training programs. In addition to our flagship climate-change curriculum, we also offer ongoing ESG training to all investment staff. This includes peer-to-peer learning for CIOs and portfolio managers, during which a select group of managers present how ESG is integrated in their specific strategies. We also have systematized training on external data, systems and tools and educational sessions across a suite of topics ranging from modern slavery, corporate governance, sector-specific themes and integrating ESG in portfolio decision making.
• Global participation in developing ESG-related intellectual property, frameworks, tools and systems. In addition to our dedicated Responsible Investing Team, approximately 100 AB personnel participate in one or more ESG working teams centred on generating deeper ESG and climate research insights within each asset class, developing new products and responding to various regulatory changes.

Literature

• Fund overview & literature (including factsheet)
• Responsible investing

Last amended: 25/01/24 10:15