Environmental, Social and Governance

Socially Responsible Investing

As a United Nations Principles for Responsible Investment (UNPRI) signatory, Fisher Investments considers environmental, social and governance issues in the investment and portfolio construction process. Further, we regularly screen and tailor our investment approach for separately managed accounts depending on any particular social and environmental guideline mandated by the client.

ESG/SRI Screens and FI’s Investment and Portfolio Construction Process

As part of the investment process, we evaluate the risk ESG issues may present to stock performance. We evaluate ESG issues on a case-by-case basis, and are willing to consider the potential impact of all types of ESG concerns. In particular, we routinely evaluate a range of governance issues and off balance sheet risks as part of our security selection analysis. These include consideration of a company’s auditors and whether their opinions are qualified or they have potential conflicts of interest, shareholder concentration, review of regulatory filings, and review of news flow from a wide range of sources for potential ESG concerns. Further, our ongoing analysis of global political drivers can influence security selection tied to potential political or regulatory risks companies face surrounding ESG issues. In situations where we believe any ESG issues present an inordinate risk to a company’s operational or financial performance, or is we believe it presents undue headline risk (where negative sentiment over the issue could present material headwind to performance), we would typically choose not to invest in that company.

Fisher Investments also regularly accommodates a range of client-mandated or requested ESG/SRI restrictions for their portfolio. Alternatively, we can oversee and determine the stocks to be restricted from purchase based on our interpretation of the socially responsible goals defined by the client. For clients with separate accounts in socially responsible or ESG mandates, the Investment Policy Committee (IPC), in conjunction with the firm’s Research Analysts, screens each security to determine whether it meets the client’s specific guidelines. This may include further analysis of the non-financial qualities of a company, such as determining if its strategic attributes and the economic/political drivers are in line with socially responsible guidelines and/or ESG principles. Fisher Investments’ Research Department has access to tools such as MSCI ESG Research to help determine a company’s suitability within a socially responsible or ESG portfolio. However, in some cases our interpretations may differ from the client’s interpretation on a security-by-security basis. If an investment’s validity during initial implementation and beyond raised any questions, additional dialogue would occur between the firm and client to help ensure compliance.

When a proactive IPC decision or client restriction causes the exclusion of a candidate security from purchase tied to ESG issues, the IPC would seek to find an appropriate replacement ot fill the intended role in the portfolio. This may involve adding a new replacement security and/or adding weight to existing positions. In most cases, the IPC is generally able to use alternate or replacement securities to replicate the desired top-down or thematic market exposure of candidate excluded for ESG reasons. As such, we typically do not expect ESG restrictions to materially impact expected risk or return characteristics of the strategy.

ESG/SRI Sources of Information

Throughout the research process, we use various databases and information vendors to collect macroeconomic and company-specific data efficiently. Assisting with environmental, social and corporate governance issues, we subscribe to MSCI ESG Research as it provides specific social and environmental screening capabilities to our Research Department. In combination with readily available public information from our ongoing analysis of holding and portfolio candidates, we are generally able to accommodate socially responsible and ESG client-mandated guidelines in separate accounts while adhering to our overall investment strategy.

ESG/SRI History

Fisher Investments is a UNPRI signatory and has been managing account with various thresholds of environmental and social mandates for nearly two decades. Over that time, we have been able to satisfy our clients’ environmentally and socially responsible mandates without compromising our broader market outlook and themes. Fisher Investments manages billions of dollars for various clients with religious, environmental and/or socially responsible restrictions without adversely affecting our themes or performance.

UK Stewardship Code

How we discharge our responsibilities under the UK Stewardship Code of the Financial Planning Council.

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