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Prudential: Environmental Social & Governance (ESG) and PruFunds

Investment news for Financial Advisers & Paraplanners

10 Dec 2018

Prudential: Environmental Social & Governance (ESG) and PruFunds

A question that is often asked is whether PruFunds have an ethical stance or indeed are they ethical portfolios? Adrian Gaspar, Product Specialist at Prudential Portfolio Management Group explains more. 

While neither Prudential or underlying managers employ ethical ‘screens’, ESG considerations are embedded in many of the underlying investment processes used to build portfolios. ESG is not the same as using ethical funds that would generally prioritise the ‘moral’ return over the financial return and would seek to screen out what they consider morally dubious industries. Using ESG factors does not mean that whole sectors or companies are ruled out, but they are used to inform the investment decision making process. ESG is more about engagement as opposed to exclusion.

The concept of responsible investment incorporating ESG factors is not new, indeed a study by Deutsche Bank in 2012 traces early socially responsible investing back to the 1960s.

ESG investing seeks to incorporate three factors in to a fund manager’s investment decisions.

Some examples of each are…

Read the full article to see what the examples are. 

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