Invesco: UK Smaller Companies Equities: What does ESG mean to us?

29 March 2021 | Jonathan Brown, Fund Manager, UK Equities and Robin West, Fund Manager, UK Equities

View the Factsheet: Invesco UK Smaller Companies Equity Fund (UK)

Our focus as active fund managers is always on finding mispriced stocks and ESG integration underpins our investment process at every stage.

Key takeaways

• Investing in stocks which have the right ESG momentum behind them can be a positive way for our funds to potentially generate alpha
• We draw upon ESGintel, Invesco's proprietary tool, which helps us to better understand how companies are addressing ESG issues
• Engaging with companies to understand corporate strategy today in order to assess how this could evolve in the future
• Monitoring how companies are performing from an ESG perspective and if the valuations fairly reflect the progress being made

The regulatory landscape is rapidly evolving, which increasingly compels organisations and investors alike to clearly demonstrate their awareness of ESG¹ issues in their decisions. Landmark initiatives such as the European Union’s new Sustainable Finance Disclosure Regulation (SFDR) are at the forefront of this shift.

We believe that our approach is honest, coherent and pragmatic. The principles behind ESG deserve to be embedded in an investment framework which encourages positive change.

Coupling this with a focus on valuation is, to our minds, the best way to deliver strong investment outcomes for our clients’ long term. This reinforces our fundamental belief that responsible investing demands a long-term view and that a stakeholder-centric culture of ownership and stewardship is at the heart of ESG integration.

Our investment process has four stages. In this paper we go through in detail how ESG is integrated into each stage of our process.

Download the full paper to learn more

¹ESG information is for illustrative purposes only. This information is not indicative of how or whether ESG factors will be integrated into a fund. Unless otherwise stated in the legal offering documents, ESG integration does not change a Fund’s investment objective or constrain the Investment Manager’s investable universe. For more information regarding a fund's investment strategy, please see the fund's legal offering documents.

Investment risks

The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

Important information

Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice.

This document is marketing material and is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell securities.