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Russell Investments has a long history of highlighting the role of environment, social and governance (ESG) factors in adding value to an investment practice (1). In this post, we share three proof points of the value-add associated with ESG awareness and integration, and analyse the importance of considering ESG risks both in the security selection process and the asset manager selection process. Ultimately, we believe that investors who are unaware of ESG and do not integrate ESG into their investment processes may be exposing themselves to additional, unnecessary and possibly unrewarded risks.
Proof point #1: Selecting securities without considering ESG may be risky business