Environmental, Social, Governance (ESG) in Conning's Investment Approach
Conning believes the integration of environmental, social, and corporate governance risk factors into our investment process serves our insurance and pension clients’ needs and allows us to adhere to our fiduciary duty.
Responsible Investment Policy
Conning's Responsible Investment (RI) Policy encompasses the core assets managed on behalf of institutional clients in North America, Europe and Bermuda. These assets comprise the majority of assets managed by Conning in North America and Europe. The Policy defines those areas where we actively incorporate processes and procedures designed to improve both economic and non-economic outcomes for our clients while meeting our fiduciary responsibilities to achieve each client’s investment objectives within established guidelines and constraints.
Principles for Responsible Investment
In 2012, Conning became a signatory to the Principles for Responsible Investment (PRI) Initiative to solidify our commitment to a discipline we have practiced for many years. PRI provides a voluntary framework by which investors can incorporate ESG issues into their decision-making and ownership practices to better align their objectives with the values of society at large. In 2019, Conning also became a signatory to PRI’s new ESG in Credit Ratings statement, committing to incorporating ESG into credit ratings and analysis.
Conning’s U.S. and London-based investment operations received a five-star (out of five) rating for the four relevant categories in their 2021 PRI Assessment Report from the Principles for Responsible Investment (PRI).
Paris Agreement Statement
Conning supports the central aim of the Paris Agreement, 'to strengthen the global response to the threat of climate change', through our Corporate Governance actions, and our approach to helping clients identify, measure and manage the potential risks associated with climate change.
Determining the long-term sustainability of an issuer’s business model is paramount, and ESG risk factors contribute to a robust, holistic assessment. Conning examines a broad array of indicators, samples of which are illustrated under the Types of ESG Indicators section on the right side of the page.
Conning's Strategic Partnerships
Conning's subsidiaries, Octagon and Global Evolution, also share our strong commitment to ESG investing. Global Evolution has been a leader in utilizing ESG research in its management of sovereign debt since the firm's inception. Both Octagon and Global Evolution are PRI signatories.
In addition, Conning’s London office and Global Evolution, based in Kolding, Denmark, are supporters of the Task Force on Climate-related Financial Disclosures (TCFD).
Climate Risk Analysis
Insurers and pension plans need to understand how different climate change scenarios might affect the financial markets and their holdings over a range of time horizons. Click here to learn more about Conning's climate risk analysis.
CarbonNeutral® Company Certification
In 2021, Conning Holdings Limited and its subsidiaries (together, “Conning”) achieved CarbonNeutral® company certification indicating that the firm’s net greenhouse gas emissions are zero for a defined duration. To achieve this certification, Conning is working with leading experts on carbon neutrality and climate finance, Natural Capital Partners. As part of this certification, the firm’s global operations completed an independent assessment of their greenhouse gas emissions. At this time, to meet its carbon neutral goal, Conning has established an offsetting program that finances several projects that support the transition to a low carbon global economy. All projects are independently verified to assure emissions reductions are occurring. The deployment of carbon credits is the first step in a journey as the firm continues to examine how to reduce its carbon footprint. For more information, please click here.
Clients utilizing ESG investing strategies and/or factors may underperform strategies which do not utilize ESG considerations. ESG strategies may operate by either excluding the investments of certain issuers or by selecting investments based on their compliance with factors such as ESG. These strategies may exclude certain sectors or industries from a client’s portfolio, potentially negatively affecting the client’s investment performance if the excluded sector or industry outperforms. ESG evaluations are subjective by nature, and Conning may rely on analysis and scores provided by third parties in determining whether an issuer meets Conning’s standards for inclusion or exclusion. A client’s perception may differ from Conning ’s or a third party’s on how to judge an issuers adherence to responsible investing principles.
Environmental, Social, Corporate Governance Considerations – Conning is a signatory to the United Nations Principles for Responsible Investing (“UN PRI”), and seeks to align its investment activities with the tenets of the UN PRI. However, Conning does not automatically negatively screen investments based on ESG, unless specified by client guidelines and does not represent that services are “ESG Compliant“ or similar. Clients can continue to hold securities or industries that pose ESG risks.