2020

AB Responsible Investing Report

 

Responsible Investing: More Than a Buzzword

Our vision is to become a recognized industry leader in responsible investing, with solutions that combine strong financial outcomes with excellence in ESG research, integration and product design.

 
 

Climate Academy: Bridging Climate Science and Investing

AB and Columbia University’s Earth Institute are partnering to tackle the pressing issue of climate change. Through a first-of-its-kind climate change curriculum, the Corporate Affiliate Program of the Columbia Climate School and in-depth investment initiatives, we’re working to harness climate and investing science—improving outcomes for investors and the planet.

 

Bridging Climate Science and Investing

First-of-its-Kind Climate Change and Impact Investment Curriculum
AB’s investment professionals are collaborating with climate experts at Columbia University’s Earth Institute to translate climate science into investment analysis. This initiative has produced a first-of-its-kind climate change and impact investment curriculum, “Climate Science and Portfolio Risk.” The coursework fills a major industry need for asset managers to dig deeper into the complexities of climate change and how it impacts economic and financial outcomes. The classes cover the risks of global climate change—including rising sea levels—and predictive modeling for extreme weather, wildfires and other threats from a warming planet. The ultimate goal is to better understand the impacts of climate change and apply this understanding to investment decisions. We’re thrilled to partner with the Earth Institute in applying climate science to drive better outcomes.

 

ESG Integration and Engagement Improve Investment Decisions

ESG considerations are financial considerations, and they must be integrated into deep fundamental research. Because ESG factors can have a material financial impact, ignoring them leaves the puzzle unfinished. ESG integration at AB is investor-driven—because investors are best positioned to conduct the deep fundamental research necessary to truly understand how ESG issues impact securities. Proprietary tools and systems advance ESG engagement, research and collaboration among our global team of analysts, responsible investing experts and portfolio managers.

 

In 2020, we engaged with over 350 of our largest holdings for action, asking companies to improve current practices or adopt new ones.  See our Engagement Report below.

Solar panels and wind turbines in the forefront of a clean, bright sky.

ESG Integration

ESG factors are fully integrated in our investment process.

Senior analyst reviewing with junior analysts potential green policies.

ESG Engagement

As active investors, we encourage firms to improve their business activities and practices.

 

Portfolios with Purpose

We manage US$27 billion in Portfolios with Purpose today, one of the most rapidly growing segments of our business. We also manage US$501 billion in assets that use ESG integration and other enhancements.

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Impact

Seeking to make a measurable social or environmental impact

Muni Impact

A fixed-income strategy that invests in historically marginalized and low-socioeconomic-status communities throughout the US. Each investment has a specific intention of reducing a societal disparity (e.g., education, health, clean water) between groups.

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Sustainable

Seek issuers that meet present needs without compromising future well-being

Sustainable Thematic Platform

Includes equity, fixed-income and multi-asset portfolios that invest in companies whose products and services contribute to achieving the UN’s Sustainable Development Goals. These portfolios focus on three themes: climate, health and empowerment.

Responsible+

Responsible+ solutions have a responsibility objective as well as a traditional risk/return objective

Responsible+

Include Global ESG Improvers focused on equities that are driving ESG improvement and positive change in the world, low-carbon versions of our flagship equity offerings, and ReUSE—a diversified large-cap core equity portfolio of investments improving on dimensions of corporate responsibility.

 

Collaborate, Explore, Advance

Proprietary Research Collaboration Platforms

We’ve innovated platforms that power collaboration between our analysts within and across asset classes as we research and engage with issuers.

PRISM

Our fixed-income ESG research platform, Prism, provides independent ESG assessments and scores that impact investment decisions. The goal, of course, is straightforward: better and faster information should empower better decisions and result in stronger portfolios.

Upward view of geometric architectural structure from internal lobby of building with view of skylights.
 

ESIGHT

ESIGHT is a one-stop online shop where all AB investment teams can access and share proprietary information about corporate ESG practices. In 2020, we launched several ESIGHT enhancements, including an ESG knowledge center, COVID-19 research and country ESG scores for fixed income.

 

Striving for Industry Leadership in Responsible Investing

We’re dedicated to helping the asset-management industry move responsible investing forward. Our commitment is evidenced by our active history and membership in regulatory and industry organizations and initiatives.

 

History of Our Commitment

  • Joined the Forum of Investors—Japan
  • Joined the TCFD Consortium in Japan
  • Joined the Japanese Stewardship Initiative
  • Joined the Investors Against Slavery and Trafficking—APAC
  • Joined Ceres
  • Became Founding Member of the Corporate Affiliate Program at the Columbia Climate School
  • Became Member of Emerging Markets Investors Alliance
     
  • Joined the AIGCC and ACGA
  • Became Boston College Center for Corporate Responsibility Supporting Member
  • Became Eurosif Transparency Code Signatory
  • Became FAIRR Member
  • Became Investor Stewardship Group Principles Signatory
     
  • Joined Investor Group on Climate Change
  • Started climate change and investing initiative with the Earth Institute at Columbia University in New York
  • Became Associate Member of LuxFlag
     
  • Joined ICI Global ESG Task Force
  • Joined ICI Proxy Committee
  • Joined ICGN Board Governance Committee
  • Became TCFD Supporter
  • Became engagement colead for Climate Action 100+
     
  • Became committee member of Securities and Futures Commission of Hong Kong’s Public Shareholders Group
  • Published Engagement Policy
     
  • Became CII Corporate Governance Advisory Council Member
     
  • Joined Climate Bonds Initiative
  • Joined Catalytic Finance Initiative
  • Joined Climate Disclosure Project
     
  • Published formal response to Japan Stewardship Code
  • Chaired AN/Securities/IB Working Group PFA21
  • Joined International Corporate Governance Network (ICGN)
     
  • Released Statement on Controversial Weapons
  • Became Japan PFA213 signatory
  • Became PRI signatory
  • Published formal response to UK Stewardship Code1
  • Joined Council of Institutional Investors (CII)
     
 
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Principles for Responsible Investment

At AB, we’ve invested responsibly for many years. In 2011, we honed and formalized our approach by becoming one of the earliest asset management firms to sign the Principles for Responsible Investment (PRI), the largest global reporting project on responsible investment. The six principles were developed by investors, for investors. They’re voluntary and aspirational, offering possible actions for incorporating ESG issues into investment analysis, decisions and practices.

In implementing the PRI, signatories contribute to developing a more sustainable global financial system. We’re committed to implementing the six PRI as we continue advancing our responsible investing efforts. This commitment has been recognized: in 2020, for the fifth straight year, AB received an A+ PRI rating for our responsible investing strategy in 2020.

 

Global Related Proxy and Governance Information

 

AB Policies and Statements

Learn more about AB’s strategy and philosophy on investing with integrity.

 

Reports