While the integration of environmental, social, and governance (ESG) factors is new to many investment management firms, the consideration of these and other risk factors as part of our valuation analysis has long been part of the investment process at Barrow Hanley. We believe that the integration of ESG factors in our investment process is aligned with the pursuit of superior risk-adjusted returns for our clients and their beneficiaries. This approach to investing makes sound business sense, and as an advocate for our clients and for the long-term futures of their beneficiaries, it is also, we believe, the right thing to do.
Barrow Hanley has more than a 35-year track record in managing socially-responsible mandates and employing ESG factors to our analysis in the construction of equity and fixed income portfolios. We currently manage more than $4.3 billion (as of September 30, 2021) in Socially Responsible Investing (SRI) related assets across all of our investment strategies, and we continue to manage "negative screened" portfolios for clients with specific restrictions and guidelines.
Barrow Hanley takes its responsibility as a shareholder seriously. As a result, we aim to ensure that the management teams of investee companies are accountable for company performance and conduct. We will seek to act as a responsible steward of assets on behalf of our clients by maintaining and updating our Proxy Voting Policy as required, voting all proxies in a manner that is consistent with our proxy policy and specific client guidelines, and engaging a company’s board and management to facilitate change that we believe will enhance long-term shareholder value.
Integrating ESG Factors into Our Research Process
Because our research process focuses on both sides of a company’s balance sheet - equity and debt – and is conducted by our equity and fixed income professionals working together as a team, we are uniquely able to effectively integrate the consideration of ESG factors in both our stock and bond portfolios and to produce additional economic "value" for our clients. While Barrow Hanley utilizes ESG research and rankings from third-party providers, our experienced internal investment team analyzes all relevant ESG inputs and reaches reasoned conclusions on an independent basis.
To be effective at ESG investing, a patient, long-term time horizon is required and the low turnover approach of the Barrow Hanley investment process over the past 30+ years has proven to be well suited for SRI portfolios. The long-term focus of the Barrow Hanley investment process further enhances our ability to be a responsible steward of our clients' assets.
Responsible Investing Committee