At Brightwell, we firmly believe that integrating sustainability into the investment process contributes to better investment outcomes through long-term value creation and better management of downside risks.
We implement this via the overall investment strategy and asset allocation, the design of our investment mandates and the selection and ongoing monitoring of investment managers. Given the ever-increasing regulation in this area, we recognise the importance of collaborating and innovating with investment managers on this journey.
Representing our clients, we use our voice and act as long-term stewards to optimise investment outcomes and drive real-world outcomes
The interconnected systemic risks we face today – climate change, nature related risks, social unrest and the changing world order – have the potential to undermine the economies and markets that we rely on to achieve the investment outcomes our clients need.
It is in the best interests of our clients for us to integrate consideration of these risks into what we do for them and to be proactive in using our influence to generate positive change, preferably in collaboration with others.
Integrating sustainability into the investment process
Our sustainable investment approach
is informed by three key beliefs:
Long-term investment horizon
A long-term investment horizon affords both a responsibility and an advantage. It gives us the ability to look through short-term market volatility, harvest the illiquidity premium offered by private assets and reduce the cost associated with portfolio turnover.
ESG integration
Integrating financially material environmental, social and governance factors into asset, manager and security selection processes helps to make better informed investment decisions. We believe that in any investment process, the application of ESG factors should be:
- integrated throughout the investment process;
- consistent with the wider investment approach; and
- evidenced in both internal and external reporting.
Stewardship
Exercising ownership rights, collaborative engagement, as well as active management of physical assets on behalf of clients can improve long-term risk adjusted returns and create sustainable long-term value.
Portfolio sustainability research & analysis
In collaboration with investment managers and via our own Environmental, Social and Governance (ESG) data analysis process, we assess portfolio-level sustainability to understand related material investment risks and opportunities. This is because we endeavour to have a deep understanding of every portfolio and use a proprietary ESG dashboard which highlights key risks and opportunities at both portfolio and scheme level. This information is used by the investment team and feeds into our macro, thematic and stewardship activities.
Asset manager & stewardship oversight
In addition, we build strong, long-term relationships with asset managers and stewardship providers to optimise our understanding of sustainability-related investment risks and opportunities for clients. We want to understand fund managers’ stewardship activities and hold them accountable against the expectations we set for them on behalf of clients.
Support services
To support our primary activities, we can also provide clients with additional services:
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