The GIB Global ESG-Plus strategy was a finalist in the Best Newcomer category at this year’s Investment Week Sustainable and ESG Investment Awards.
Here we speak to Katherine Garrett-Cox, CEO of GIB Asset Management, about the launch of the strategy, portfolio construction and plans for the future.
Why did you launch the GIB Global ESG-Plus strategy, and what are you trying to achieve for investors?
GIB is a new breed of asset manager with a deep heritage and a vision for the future. We provide solutions for clients' long-term investment objectives while seeking to build a more sustainable world.
Many investors are attracted to passive investment solutions but want to know that their portfolio both takes account of ESG factors and engages with those companies to drive improvements in their sustainability metrics. The purpose of our ESG-Plus strategy is to combine these elements.
The ESG-Plus strategy allows investors to gain broad developed-market equity exposure, with the target of outperforming the MSCI World benchmark over a rolling three-year period, while offering superior sustainability metrics.
Security selection is underpinned by our proprietary methodology, built around data-driven ESG scoring that evaluates firms' ESG exposures and opportunities.
Engagement is critical to our approach, and our team carefully seeks ways to drive positive impact through their engagement activity.
Can you describe your rules-based investment process on the strategy?
Our investment process provides robust, transparent and financially material ESG scores, based on multiple sources. This allows us to use ESG data as a potential leading indicator of company performance.
A robust ESG investment strategy requires a thorough understanding of the data, the underlying securities and what constitutes good ESG credentials.
We address this first by assessing each company using a daily feed of hundreds of individual data points, screened for inaccuracies.
We overlay materiality weights to amplify the most relevant data for each company.
Our scoring model draws on ESG and thematic research, taking into account industry and geographical differences, to understand how trends are progressing at the individual firm level and the underlying drivers of changes in ESG scores.
This includes careful integration of global targets such as the Paris Climate Agreement and EU targets for renewables, among other leading standards.
As a result, we can assess companies across the broad spectrum of material ESG metrics, differentiating between companies' sustainability credentials and identifying where and how companies are delivering improvements.
The rules-based approach allows for investments in companies that are best-in-class (80% of the portfolio) or showing improvements (20% of the portfolio).
The methodology also applies screening against our responsible investment policy, ensures that companies meet a minimum ESG threshold, and allows us to react rapidly to sustainability-related controversies and issues.