At William Blair Investment Management, environmental, social, and corporate governance (ESG) factors are among many considerations that inform our investment decisions—inextricably linked with our fundamental assessment of the quality of corporate management and sustainable value creation potential.
For all of William Blair's fundamental equity and fixed-income strategies, ESG factors are inextricably linked with our fundamental assessment of company management and the sustainability of competitive strengths.
Our research analysts provide a qualitative summary of what they view as each company's relevant ESG-related risk exposures and opportunities. These issues are documented within our company recommendation reports and discussed by the analysts and portfolio managers during our regular team meetings.
ESG insights are primarily informed by proprietary research, including company meetings and data aggregation from multiple internal and external resources. Our assessment of potential ESG risks and opportunities for different industries and companies is supported by a proprietary materiality framework that was developed internally by the investment teams, with input from the Sustainability Accounting Standards Board (SASB) and sustainable investment research providers.
In addition to our proprietary ESG research, third-party ESG company ratings are systematically incorporated into our research reports to provide additional context. These ratings are discussed as part of the original buy recommendation, depending on data availability and our assessment of materiality with respect to the investment thesis. William Blair currently utilizes ESG ratings from MSCI ESG Research and routinely monitors the research vendor landscape for additional ESG research inputs. We also continually seek expanded universe coverage and data quality improvement from our existing research providers.
From a governance perspective, our key focus is on board composition, minority shareholder treatment, management incentives, and corporate culture. Environmental areas of focus include climate change, natural resources stewardship, and pollution and waste management. Social considerations include human capital management, customer well-being, supply chain management, and community relations. The materiality of these issues varies by country, industry, and company.