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ESG

Overview

Brandywine Global is a signatory to the UN-supported Principles for Responsible Investment, a network of investors committed to investing responsibly and supporting a sustainable global financial system. Our status as a PRI signatory underscores our commitment to incorporating environmental, social, and governance (ESG) factors into the investment decision-making process and to furthering our active ownership efforts while striving for the best possible return outcomes within our investment guidelines.

As fiduciaries and responsible stewards of our client's assets, we recognize that relevant and material ESG issues can meaningfully affect long-term performance, and that these factors are critical components of our disciplined, integrated analysis and ongoing monitoring.

ESG Integration Across Our Teams

Our ESG integration framework spans across multiple assets classes, leverages the strengths from each investment team, and fosters internal collaboration. With a value orientation as a shared philosophy across investment teams, ESG research is therefore integral to our comprehensive price and information risk analyses. We carefully strike a balance between implementing a consistent approach to ESG integration and ensuring that sustainability research and analysis remain authentic to each team’s distinctive investment process. Our top-down, bottom-up investment approach extends to how we account for ESG risks and opportunities, as we assess these factors from at the broadest country and macro levels, down to sector and company-specific themes. Together, we share five facets to ESG integration.

Dual Research Responsibilities

Portfolio managers and research analysts analyze both ESG factors and traditional economic and financial indicators.

Inherent Materiality

We focus on material ESG issues that may impact a country’s economic growth, a company’s business activity, etc. These sustainability risks also inform our engagements.

Proprietary ESG Ratings

Framework for evaluating ESG factors, including improvements or deteriorations in factors over time, comparison against sovereign or industry peers, and how a risk or opportunity is being addressed.

Improving ESG Scores & Fundamentals

We seek issuers that offer attractive valuations, demonstrate improving sustainability and economic risk profiles, which should be reflected in asset prices.

Engagements

Through our stewardship initiatives, we work with issuers to reduce sustainability risks. We believe collaboration is important, and therefore collectively engage across our investment teams and also with important industry working groups. In addition to promoting responsible investment and active ownership, the takeaways from sovereign and corporate engagements enhance our price and information risk analyses.
Analysis and integration of ESG factors is qualitative and subjective by nature and may evolve over time. There is no guarantee that the criteria used, or judgment exercised, by Brandywine Global will reflect the values of any one particular investor.

Going Further,
Together »

In 2020, we focused on rolling out the following initiatives to deliver greater value and better transparency into our ESG program: engagement reporting for all investment teams, collective action across our investment teams, a sovereign engagement framework, climate risk assessments, and participation in industry-wide collaborative engagements. Our 2020 Stewardship Report provides greater detail into these initiatives undertaken throughout the year.