We believe that material ESG factors will be determinants of success of the companies and countries in which we invest, and so by integrating ESG in our investment processes we will improve our long-term client returns.
GMO’s investment approach has always focused on identifying the most meaningful drivers of success and how we can use those insights to improve our returns. We consider ESG factors to be such drivers of success.
ESG helps us identify issuers who are working to address underappreciated ESG risks and, in turn, enhance their long-term profitability and command a higher premium into the future.
Sustainability and Responsible Investing Report
GMO publishes an annual Sustainability and Responsible Investing Report to demonstrate how we are integrating ESG considerations in our investment approaches and how we are committed to sustainability and diversity, equity, and inclusion.
Read our 2022 Sustainability and Responsible Investing Report here.
Net Zero Asset Managers Initiative
GMO is a signatory of the Net Zero Asset Managers initiative, committing to reduce net emissions in our investments to zero by 2050 or sooner, in line with efforts to limit global warming to 1.5 degrees Celsius. We have set targets for reducing emissions and increasing the proportion of assets to be managed in line with achieving this goal.
Read about GMO’s initial net zero targets.
GMO’s ESG Integration
Hardik Shah, GMO’s ESG Practice Lead, discusses how GMO investment teams incorporate ESG in differentiated ways across asset classes appropriate to their various investment styles.
The GMO ESG Score
Several GMO investment teams collaborated in 2021 to build our own GMO ESG Score, a proprietary, bottom-up framework that assesses the ESG quality of companies through multiple lenses, with a focus on material ESG issues. Teams utilize the ESG Score in different ways as an input into their investment processes.
Learn more about the GMO ESG Score in our Sustainability and Responsible Investing Report.
GMO’s Responsible Investment Policy
We believe it is important to transparently hold ourselves accountable for our commitment to ESG investing. Therefore, we are happy to share our Responsible Investment Policy, which outlines our firm ESG philosophy and practices.
The Grantham Foundation
Jeremy Grantham is recognized as a leading advocate in the fight against climate change. Jeremy founded the Grantham Foundation for the Protection of the Environment in 1997 with a mission of protecting and conserving the natural environment.
GMO has benefited tremendously from our partnership with the Grantham Foundation, including through discussions with our Focused Equity team about climate change science and technology in private markets, to help the team manage GMO’s Climate Change Strategy.
Jeremy Grantham, GMO co-founder and Long-Term Investment Strategist
“Investing in sustainability means investing in our grandchildren, in our civilization, in our survival as a species. GMO has now made sustainability integral to our investment processes. All of us need to make sustainability integral to what we do: it is the fight for our very existence on this planet.”