How Caliber Investment Incorporate Responsible Investing into the Investment Process
What is Responsible Investing?
Responsible Investing is a process that considers environmental, social, governance (ESG) and ethical issues in the process of research, analysis, selection and monitoring of investments.
How is Responsible Investing applied to the Portfolios Caliber manage?
As a specialist Investment Manager, Caliber Investment manages PIE portfolios for its institutional clients. Caliber Investment is responsible for the Investment framework which spans all aspects of the investment selection process from strategy formulation and implementation through to ongoing monitoring and review of the portfolios.
Caliber’s Responsible Investing approach is fully integrated into the framework; it is not a standalone process. It is this framework that dictates the Environmental, Social, and Governance (ESG) - Sustainable approach in the portfolios.
The primary phase of the process develops the risk exposure strategy, in doing so it determines the best way to access a particular risk exposure, of which an active Manager or passive strategy may be advised.
Caliber carries out in depth research and due diligence of potential solutions which includes active Managers. In assessing these solutions, the approach to Responsible Investing and incorporation of ESG factors is considered. In alignment with Caliber’s Responsible Investing beliefs, investment stewardship and a long-term investment horizon are two characteristics sought in a Manager. Only Managers with core ESG integration, a strong focus on corporate governance and who play an active shareholding role, are considered for inclusion in the Portfolios. Importantly, underlying Managers Responsible Investing and ESG methods are aligned and understood before being added to the portfolios Caliber manage.
Following the Portfolio Construction phase, ongoing engagement and monitoring of Managers, including their ESG and Responsible Investing approach, is undertaken. Caliber encourage Managers to actively engage with companies and require regular reporting from Managers such as proxy voting reports.
The ESG approach used by the underlying Managers will vary. Their approach will be influenced by the Manager’s investment philosophy, size and particular asset class. Active engagement can take a variety of forms, from specific campaigns to ongoing interactions with portfolio companies and informed proxy voting, as well as the wide range of topics and issues covered. Many underlying Managers also have exclusions list they apply to the funds they manage. Additionally, some funds may have specific ESG objectives such as carbon reduction or aligning with the UN’s Principals for Responsible Investment.