Within this rapidly evolving environment, a basic understanding of what ESG means in an investment context is absolutely essential for all investors.
From protecting real estate assets from rising tides, to intensive scrutiny of bond issuers’ risk management practices, PGIM’s ESG investing report provides a comprehensive view of how PGIM incorporates environmental, social and governance factors into our investment processes. Using real life examples drawn from our investment portfolios, the report demonstrates how each of our autonomous asset management businesses has developed asset-class specific ESG approaches, analytical frameworks and research capabilities to identify investment risks and opportunities arising from our rapidly changing world, with the goal of providing transparency around our actions as fiduciaries for our clients.
At PGIM, we believe asset-class-specific ESG frameworks and integration represent the most credible approach to ESG from a fiduciary and client perspective. Analyzing investment risks and opportunities arising from material ESG factors leads to better long-term investment outcomes, and using ESG analysis to manage investment risk is a fundamental component of generating attractive risk-adjusted returns.
The global transition to environmental and social sustainability provides significant investment opportunities combined with positive impact, and active stewardship is integral to influencing investment outcomes and promoting a well-functioning financial system. Strong ESG capabilities and expertise are essential to meeting the needs of clients whose investment objectives go beyond risk/return optimization to include environmental and/or social goals.