ESG & SRI Investing

The Opportunity

Investor demand for social or environmental impact along with financial results has exploded in the United States in recent years.  From the beginning of 2012 to the start of 2016, socially responsible assets in the US have grown from $3.7 trillion to $8.7 trillion, or approximately one in five dollars under professional management.1

1Source: US SIF Foundation 2016 Report on Sustainable and Responsible Investing Trends

Our Approach

Since our inception, our firm's goal has been to help our clients meet their investment objectives by delivering the highest level of return for a given level of risk.  We believe that the inclusion of environmental, social, and corporate governance (ESG) factors in our traditional research process can have a meaningful impact on the risk/return profile of investment portfolios.  We employ an integrated, or "Best-in-Class3" investment process which goes beyond the purely exclusionary style of traditional SRI investment mandates.  The results of this process are stand-alone Mid Cap Growth and Large Cap Growth ESG portfolios.

 

In addition, for investors or institutions seeking to align their investments with their values or mission we have offered exclusion-based portfolios for over twenty years.  We categorize this approach as Socially Responsible Investing (SRI).  SRI clients consult with our investment management team to impose restrictions to exclude specific companies or industries from portfolios as their respective business practices conflict with our client's social, ethical, or moral mission statement.

 

ESG FACTORS

Our integrated, or "Best-In-Class3", investment process differs from the exclusionary style of traditional SRI mandates by proactively considering ESG factors in the portfolio construction process.

 

Through incorporation of ESG research4 and screening tools into Congress’ equity research , a holistic view of corporate conduct is created.  Preferred names in the fund are those that we deem to provide a net benefit to society. A full scope of ESG issues are considered, including, but not limited to:

 

Environmental: preparedness, GHG emissions, carbon intensity, track record, etc.

 

Social: supply chain, community involvement, human rights, diversity, etc.

 

Governance: whistleblower programs, board independence, executive pay, etc.

 

 

EXCLUSIONARY SCREENS

We offer customized equity and fixed income portfolios that avoid exposures to companies or sectors that conflict with your social objectives.  Common examples of exclusions include manufacturers of fossil fuels, weapons/firearms, alcohol, and gambling.  In addition, we have a long history of working with faith-based  organizations to meet their specific requirements.  In particular,  we  offer screening based upon the United States Conference of Catholic Bishops directives.

3"Best-in-Class Selection" is one of the six methods for considering ESG issues used by investment managers according to the CFA Institute, it involves preferentially investing in companies with better ESG performance relative to their peer group.  Source: CFA Institute Environmental, Social, and Governance Issues in Investing A Guide for Investment Professionals 2015

4Congress has partnered with Sustainalytics for ESG research and analytics

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Congress Asset Management

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Boston, MA 02210

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© Congress Asset Management Company 2016