Environmental, social and governance (ESG) is at the heart of the investment process, says Jeremy Richardson, a senior portfolio manager at RBC Global Asset Management in London, UK. Richardson is part of a team of 12 on the Morningstar 5-star rated RBC Global Equity mandate, led by Habib Subjally,
"Fundamentally," says Richardson, "finding great companies that are conducting themselves responsibility is very important to us. ESG has become more and more important and we want to know that the management teams are making the right decisions for the business and its employees to drive long-term performance."
Risk management is also at the heart of the mandate. To that end, three people on the team -- called "portfolio engineers" -- focus on risk and portfolio construction, including a diversified mix of holdings across sectors and industries. "People always talk about capital and allocation," says Richardson, "but it's actually the risk you take that drives the returns. It's very important that you're taking risk in the areas where you expect to get rewarded."
