One of the challenges to presenting a variety of sustainability options is being clear on the definition. Environmental, social and governance (ESG) can mean different things to different people and is an emotive topic.
Some people may have ethical views, which will mean that they don't want exposure to e.g. alcohol. Other people could be more focused on environmental issues and don't want any exposure to fossil fuels, for example.
Moreover, ESG funds can often be similarly labelled but do something completely different. For this reason, Bethan Dixon, portfolio manager, Quilter, emphasises how they focus on developing a very clear definition of what responsible and sustainable are, and what they're not.
She says: "The first step is we whittle down long lists of funds to fit the investment criteria. This is achieved through a screening process that seeks to narrow the universe of funds that potentially meet the investment criteria through applying a range of filters including a proprietary set of ESG filters that are aligned to either our Responsible or Sustainable definitions.
"The next step, and most important, is fund due diligence, where the manager's approach to ESG integration and sustainable investing is reviewed."
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