As more institutional investors consider environmental, social, and governance (ESG) issues in their investment programs, Verus believes our role in the ESG discussion should focus on understanding how investment managers integrate ESG into their decision-making process, how ESG-related decisions are expressed in portfolios, and, ultimately, how these decisions impact client outcomes.
In this paper, we address how environmental, social, and governance (ESG) considerations are integrated into our manager research process. We address Verus’ approach to ESG issues when advising clients and link that to what ESG due diligence looks like in researching investment managers. Next, we consider the spectrum of ESG integration as defined by the primary objective of the product. Finally, we address the challenges that ESG considerations pose for hedge fund managers and private equity general partners.