GMO believes environmental, social, and governance (ESG) factors can have a meaningful impact on the long-term success of companies and countries. We incorporate them where we believe doing so will improve long-term, risk-adjusted investment returns and further our clients’ objectives.
Since our founding over 40 years ago, GMO has been at the forefront of incorporating non-traditional financial and non-financial measures into our investment strategies. In 1987, we began implementing ESG-related factors into client portfolios, including social and environmental screens.
Today, we continue to focus on understanding how the integration of ESG factors can improve our clients’ investment results and help us evolve our investment practices.
We look to differentiate our approach to integrating sustainability metrics by focusing on those that can improve a strategy’s risk-adjusted return potential. As with other areas of investment research, we look to identify factors whose inclusion will provide information for differentiating expected investment returns within a strategy’s targeted investment horizon.
GMO views proxy voting as an integral aspect of security ownership. We believe the alignment of company management’s goals with those of its shareholders and other stakeholders is the strongest route to protect our clients’ investments as minority stakeholders. We seek to vote proxies to encourage and reward action that creates sustainable, long‐term growth.
By partnering with investors and other organizations, we believe we can help encourage the incorporation of ESG factors into decision-making around the globe. We have added our voice as a signatory to or member of the following.
We believe that transparency is a critical element in creating meaningful dialogue among stakeholders, asset owners, investment managers, and companies, and so we provide the following information detailing our efforts.