By George R. Evans via Iris.xyz
We believe good environmental, social, and governance practices can be additive to performance.
The investment interest around environmental, social, and governance (ESG) criteria is growing among a wide variety of investors, but the concept isn’t new. ESG factors have been and are important to any holistic understanding of a business. In some ways, they are the most foundational or bedrock investment issues, and we have found in our own strategies that good ESG practices at companies can be additive to investment performance. The reason is quite straightforward: ESG characteristics matter in a very real economic sense.
ESG miscues can derail a company’s ability to create economic value for its shareholders on an ongoing basis. Increasingly, companies are realizing that it is in their business interests to perform well against ESG criteria. Although they articulate separately, environmental, social and governance standards are almost never separate and distinct. They can interact with one another, often positively, sometimes negatively, and have important implications for the sustainability and durability of a company’s business economics.
ESG Supports Long-Term Value Creation
For nearly 50 years, the Global Equity Team at OppenheimerFunds has had a consistent aspiration. We seek to be long-term investors in above-average businesses that have significant competitive advantages, and that are beneficiaries of structural shifts in economic growth, technology, and demographics. Capturing the compounded effects of these structural shifts requires longer-than-average holding periods, which is generally our approach. Thus, it is clear that any business that is capable of long-term value creation for its shareholders must excel at ESG.
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