When analyzed properly, most ESG issues manifest themselves as challenges to individual economic opportunity, firm and enterprise dynamism, and state and national economic growth. This includes ESG issues that, when considered superficially, are not immediately considered in many investment processes. While our investment process does not employ 'negative screening,' we do believe that the identification of challenges related to sound governance and the sustainable utilization of natural resources and human capital play an important role in both the top-down and bottom-up analyses that form much of the empirical basis of our larger investment process.
For these reasons, APM supports the United Nations Principles for Responsible Investing (PRI) which are incorporated in the PRI signatory declaration:
As institutional investors, we have a duty to act in the best long-term interests of our beneficiaries. In this fiduciary role, we believe that environmental, social, and corporate governance (ESG) issues can affect the performance of investment portfolios (to varying degrees across companies, sectors, regions, asset classes and through time). We also recognize that applying these Principles may better align investors with broader objectives of society. Therefore, where consistent with our fiduciary responsibilities, we commit to the following:
to incorporate Environmental, Social and Corporate Governance (ESG) issues into investment analysis and decision-making processes;
to be an active owner and to incorporate ESG issues into our ownership policies and practices;
to seek appropriate disclosure on ESG issues by the entities in which we invest;
to promote acceptance and implementation of the Principles within the investment industry;
to work with the PRI Secretariat and other signatories to enhance their effectiveness in implementing the Principles;
to report on our activities and progress towards implementing the Principles.
APM is in the process of confirming its compliance capabilities with the reporting requirements of the UN PRI and anticipates becoming a signatory to the declaration.