We believe responsible and sustainable investing extends beyond the evaluation of quantitative factors and traditional fundamental analysis. Where material, it should include the analysis of an entity’s impact on its stakeholders, the environment and society. We recognize that these environmental, social, and governance (ESG) factors can affect investment performance, expose potential investment risks, and provide an indication of management excellence and leadership. As a result, it is important for our investment professionals to understand how ESG factors influence our investment decisions. To this end, GSAM continues to improve the process of integrating the analysis of these factors into our investment and company engagement processes, where appropriate and consistent with our fiduciary duty, as well as communicate on our progress in this regard and contribute to the development of best practices within the investment community.
In December 2011, GSAM became a signatory to the UNPRI. The UNPRI is a global, collaborative network of investors established in 2006 in recognition of the increasing relevance of environmental, social, and governance (ESG) issues within the investment process. The Principles set forth by the UNPRI are a set of best practices for incorporating ESG issues into investment decision-making where consistent with fiduciary responsibilities. As a signatory, GSAM has committed to considering the investment implications of ESG issues within our portfolio management and investment decision-making processes, where appropriate and consistent with our fiduciary duty.