Parametric Responsible Investing
Responsible investing has a long history in the United States, with more and more investors wondering how they can incorporate their environmental, social, or governance (ESG) principles into their portfolios. From long-standing concerns such as tobacco or firearms to newer issues such as climate change or boardroom diversity, investors increasingly want to understand and manage the environmental and social impact of public companies. In our experience, investor goals fall into one of two categories: controlling what kind of companies to own or trying to get companies one owns to behave differently.
Parametric’s approach to responsible investing aims to meet both sets of goals, helping investors understand their choices and those choices’ effects on their portfolios. This paper details the approaches involved in each category and helps identify which may be appropriate depending on an investor’s objectives.