ESG investment analysis support to a UK-based asset management firm

Facilitating a seamless integration of ESG criteria into the client’s investment decisions
Empowering the client to make strategic and more aligned investment decisions
Improving portfolio performance through lowering investment risk and enhancing long-term value creation

CLIENT CHALLENGES

The client, a leading UK-based asset management firm, faced challenges in effectively integrating ESG criteria into the investment process and sought insight on a number of companies’ ESG investment outlooks, adoption rates, size of investment, ROI expectations and other related matters.

OUR APPROACH

We conducted thorough research and analysis, mainly to understand ESG investment outlooks and trends, adoption rates and practices, size of investment and ROI expectations; this entailed the following:
- Initial desk research and sample selection
  - We started by conducting extensive research of the ESG investment landscape in the UK and Europe, including the latest trends, regulatory and compliance developments and widely adopted best practices.
  - Based on this, we drafted sample-selection criteria to ensure we analysed a representative sample of companies across sectors and regions so we could gain a holistic view of ESG practices.
    - The sample consisted of 300 companies from diverse sectors, including finance, healthcare, energy, tech and manufacturing.
  - Data collection
    - We designed a 15-minute online survey to gain information on environmental impact, social responsibility initiatives, corporate governance standards and ESG investment strategies.
    - Participants were senior executives responsible for ESG initiatives at the target companies (30% of the respondents were C-suite executives and 70% held manager/supervisor positions).
    - The response rate was 83%; we received responses from 250 companies.
  - Data analysis and reporting
    - We conducted in-depth statistical analysis to evaluate the target companies based on their ESG practices:
      - environmental impact, including waste management and carbon footprint
      - social responsibility initiatives, including community engagement programmes and human rights policies
      - corporate governance standards
    - We submitted a report to the client highlighting key actionable insights on ESG investment outlooks, adoption rates, ROI expectations and other relevant matters and our strategic recommendations.

IMPACT DELIVERED

Our thorough research and analysis enabled us to provide the client with the following:
- Detailed overviews of the target companies’ ESG performance, based on evaluating their environmental impact, social responsibility initiatives and governance standards.
- Assistance in efficiently integrating ESG criteria into investment decision, based on considering ESG factors and traditional financial metrics.
- Insight on current trends and potential developments in the investment landscape, based on analysis of investment outlooks, adoption rates and investment size.
- A list of companies with strong ESG practices, reducing investment risk associated with ESG issues, as investing in companies with robust ESG frameworks would enhance the long-term value of investment portfolios.

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