Since 2014, SGA is a proud signatory to the United Nations Principles for Responsible Investment, which supports the integration of environmental, social, and governance (ESG) factors into investment decisions, to better manage risk and generate sustainable returns over time.
At SGA, we recognize that ESG factors can impact a company’s financial performance, competitive positioning, brand equity, and other determinants of long-term shareholder value. As a result, we seek to assess key ESG factors as they relate to the sustainability of a business’s long-term growth trajectory. Stocks that are highly regarded on ESG grounds alone, without the long-term growth or valuation characteristics we seek, do not make their way into our portfolios.
SGA’s Three Areas of Focus
- SGA’s bottom-up ESG research: corporate governance, business model sustainability, management incentives, and plans for maximizing shareholder value.
- Sustainalytics' ESG analysis and rankings for all companies on SGA’s Qualified Company List.
- In addition to ESG factors, SGA considers revenue predictability, global runways of growth, sustainability of earnings growth, and valuation as part of the investment decision.
- SGA does not invest in companies expected to implement activist positions, nor does it invest based on moral or ethical opinions.
- SGA will voice concerns on business strategies, governance, and reporting when needed, and decline to purchase or hold shares if a business fails to meet SGA’s quality expectations.
- Companies tend to value our longer-term perspective compared to short-term investors that are less concerned with strategic business direction and long-term wealth creation.
- SGA considers the litmus test of any corporate proposal to be whether its adoption will allow the company to carry on its affairs in such a way that clients’ best interests are served.
- SGA seeks to represent clients’ interests through a responsible proxy voting policy created (and maintained) based on current legislative materials, corporate governance and proxy voting studies, shareholder and management proposal analyses, and industry best practices.
- Any judgmental issues are reviewed by senior investment professionals to determine if adopting the proposal is in the best interest of clients.