Neuberger Berman announced as finalist for PRI Awards for Climate Change ESG initiative

From

Jonathan Bailey

Global investment manager Neuberger Berman has been shortlisted for ESG incorporation initiative of the year at the upcoming PRI awards for systematically analysing the potential investment implications of climate change across portfolios.

The firm was also awarded top scores across all categories in the latest United Nations-backed Principles for Responsible Investment (PRI) assessment report which measures Environmental, Social and Governance (ESG) integration efforts among 1,100 investment firms worldwide.

Neuberger Berman obtained the highest score, A+, for its overarching approach to ESG strategy and governance. It also earned an A+ for ESG integration across every asset class, and is rated above the peer median on every category.

Head of ESG Investing at Neuberger Berman, Jonathan Bailey, noted the firm’s top score and shortlisting reflects the firm’s overall approach to ESG across all investment practices.

“Both industry recognitions reflect the work of our analysts and portfolio managers in integrating our ESG philosophy and proprietary ESG ratings systems across asset classes,” said Mr Bailey.

As part of Neuberger Berman’s integrated ESG approach, portfolio managers analyse and review which securities are likely to financially benefit or suffer from changes in weather patterns, regulation or technology shifts.

By systematically analysing the potential investment implications of climate change across portfolios, the firm has developed a resource to enhance long-term value creation for clients.

For example, Neuberger Berman runs a range of climate change scenarios, including those aligned with a 2° Celsius and a 1.5° Celsius transition. The results allow the firm’s analysts to focus on engaging with companies and management teams who appear to be particularly at risk and provide bottom-up insights to further enhance understanding of climate risk.

“As the world transitions to a lower carbon economy, it is important for us to understand how best to position our portfolios to serve our clients’ objectives,” said Mr Bailey.

“No scenario will be perfectly accurate, but by systematically modelling climate-related risk and opportunity, our portfolio managers are better informed about how their portfolios are positioned. They can then choose how best to apply all the tools of active management, whether that is to engage or ultimately to sell a security when it no longer offers an attractive risk-adjusted potential return.”

In recent years, the employee-owned investment manager has made improvement in its score, most notably in Fixed Income (Corporate Non-Financial) and Private Equity. This year, the firm improved its score to A+ for its approach to Active Ownership in Listed Equity—a grade that only 13% of asset managers with >US$50b in AUM received.[1]

 

 

Neuberger Berman was also shortlisted for ESG incorporation initiative of the year at the upcoming PRI awards. Winners will be announced on 10 September.

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