PRI launches A practical guide to ESG integration for equity investing


The PRI has launched A practical guide to ESG integration for equity investing. To guide investors – both asset owners and investment managers – who are implementing ESG integration techniques in their investment process, this report is the most comprehensive description to date of what ESG-integrated analysis is, and how it works in practice.

The guide contains information and case studies on integration techniques that apply to investment strategies including fundamental, quantitative, smart beta and passive investment. It assists asset owners and investment managers with constructing ESG-integrated investment processes and helps asset owners to assess their managers’ integration practices. A chapter on sell-side investment research maps out the types of ESG-integrated research available, and demonstrates brokers’ integration techniques.

Integrating ESG factors into analysis of listed equity investments is the most widespread responsible investment practice in the market today. Several drivers, including capital flowing into funds that integrate ESG factors and the growing awareness of academic research supporting the benefits, are encouraging investors to either start integrating ESG factors into analysis for the first time or to apply integration techniques across more of their assets

The case studies and insights showcased here demonstrate that ESG integration practices are becoming more sophisticated and that the impact of ESG issues on the portfolio is quantifiable. Anticipating that ever-more momentum, towards responsible investment in financial markets and towards more sustainability in the wider economy, will make ESG integration standard practice, the PRI hopes this guide will assist signatories and the investment industry as a whole in preparing for the new norm.

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