Environmental, Social, Governance

SGI’s goal is to improve risk-adjusted performance for our clients. We seek to enhance portfolio returns by managing risk. SGI is committed to responsible investment. We believe responsible investing must identify the risks surrounding companies and the way each does business. Through this commitment, we seek to have a positive impact on the world, the communities in which we live and work and lower downside risk. We believe that our investment processes are adept at the customization and optimization of the risk/return relationship, including the incorporation of ESG considerations.

Environmental, Social, Governance (“ESG”) considerations afford our firm the ability to identify greater downside risks to companies in today’s market environment. Our investment processes and ESG restrictions can easily incorporate the investment practices with clients’ investing views, and further broaden the impact of our work to meet the needs of each client. Using a disciplined, quantitatively driven investment process permits SGI to produce strategies that aim for outperformance, yet are also customizable to meet individual client needs. As such, SGI incorporates ESG factors into the investment process in three main ways:

ESG factor research

SGI is committed to robust quantitative research regarding ESG. This includes identifying ESG factors that enhance alpha and factors that minimize downside company specific risks. To date, SGI has identified several areas of study in ESG. Especially within the Governance arena, we have successfully incorporated these in our Risk Overlay Processes. Typically, Environmental and Social factors are proxy for sector bets, which can lead to increased relative risk. Within Governance, however, we have found significant downside risks catalysts to help avoid idiosyncratic, stock specific, risk.

Our assessment of ESG variables is continuous. We collaborate with several data providers as well as revisit other sources as they develop additional granularity.

ESG Restrictions

SGI has the scalable capacity to meet clients’ different ESG needs as well as specific requirements, and has a robust procedure to implement client guidelines in our investment process. In addition, SGI has extensive experience in investing through the application of exclusionary screens. Our experience — from identifying and removing stocks related to various issues to the creation of complex, custom environmental screens – has led SGI to restrict all stocks in the following industries: Gambling, Pornography, Alcohol and Tobacco.

Proxy voting rights

To further advance its responsible investing footprint, SGI offers its investors the option to leverage either (i) a corporate governance-centered voting policy, SGI’s default voting policy or (ii) for each client to vote each proxy. SGI’s corporate governance-centered policy is custom-developed, and seeks to promote long-term shareholder value and risk mitigation through responsible corporate governance requirements.

Summit Global Investments is committed to responsible investment. Through this commitment, we seek to have a positive impact on the world, the communities in which we live and work and our clients risk and return. We believe that our investment processes are adept at the customization and optimization of the risk/return relationship, including the incorporation of ESG considerations.

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