Sustainability
at Lingohr

The interplay of economic, ecological and social goals is crucial for a healthy economy and the generation of long-term, attractive investment returns. We are convinced that the consideration of sustainability criteria (ESG criteria) for investments contributes to a solid and transparent market environment while being beneficial to society as a whole.

We believe that incorporating ESG criteria can provide investors with additional information about companies. As such it supports meeting ethical goals and contributes to long-term asset growth for investors by improving investment results. ESG considerations are integrated into the stock selection and portfolio management processes both on a company-wide basis as well as tailored to individual client needs.

“The PRI is the world’s leading proponent of responsible investment. It works to understand the investment implications of environmental, social and governance (ESG) factors and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions. The PRI acts in the long-term interests of its signatories, of the financial markets and economies in which they operate and ultimately of the environment and society as a whole. ” (source: www.unpri.org)

The principles are as follows:

1. We will incorporate ESG issues into investment analysis and decision-making processes.
2. We will be active owners and incorporate ESG issues into our ownership policies and practices.
3. We will seek appropriate disclosure on ESG issues by the entities in which we invest.
4. We will promote acceptance and implementation of the Principles within the investment industry.
5. We will work together to enhance our effectiveness in implementing the Principles.
6. We will each report on our activities and progress towards implementing the Principles.

Integration possibilities

The ESG integration at Lingohr combines normative screens with materiality assessments. In the first step, normative screens exclude companies in which an investment is uncompromisingly out of question for us. This includes business involvement in landmines and cluster bombs as well as companies that violate certain aspects of the UN Global Compact.

As asset managers, we specialize in identifying fundamentally attractive companies. Hereby, we pay particular attention to identifying companies with sustainable cash flow potential. While a company may appear cheap on the basis of traditional financial indicators, ESG criteria help us to identify material effects on portfolio companies and potential buy candidates. Individual cases are checked as part of the qualitative evaluation and potentially excluded from the investment process.

In addition to the company-wide ESG integration, Lingohr also offers tailor-made solutions. This includes positive or negative lists (black- / whitelists) with which investors can exclude companies they do not want to invest in. Clients can also define their own criteria for normative exclusions - this includes industry exclusions, exclusions from various business participations (e.g. alcohol, armaments, tobacco) or significant controversies to name a few. On the portfolio level, targeted ESG optimization can be applied using more complex data-driven solutions.

Team approach and development

All Lingohr employees are committed to responsible investment and encouraged to share our principles and beliefs with existing and potential clients, business partners, and the investment industry as a whole.

In addition to the daily integration of and working with ESG criteria, employees are continuously encouraged to further develop themselves in this area. This includes attending conferences as well as targeted trainings and seminars. Our investment team now also includes 4 EFFAS-certified ESG analysts (CESGA).