“Today, we’re one of the first investment firms in the world to embed ESG core factors across our entire investment process and at the foundation of how we think about building products.” – Som Seif, CEO and Founder
When Purpose Investments was created, CEO and Founder Som Seif believed there was a way for an investment firm with modern principles to support social good without compromising superior performance. If it placed its clients at the centre of its vision, Purpose would be a for-profit company that was also a positive social utility.
As with all its core values, Purpose designs its solutions by knowing that responsible investment principles are a key factor in determining which companies will perform strongly in the long run. An investment firm has a responsibility when it manages large pools of capital. Purpose believes, as a fiduciary, it can build value into its products by making sure its underlying investment processes use environmental, social and governance (ESG) factors to favour companies that have demonstrated a strong commitment to sustainability.
Historically, approaches to sustainable investing simply narrowed the scope of potential investments and traded values for performance. Investors were forced to accept weaker returns in exchange for responsibility. Purpose aimed to create a strategic, integrated approach. By fully integrating ESG factors in a unique way, they believe they can maximize value—and client returns—while at the same time focusing on the impact of investing responsibly.
“We don’t think our clients should have to choose between long-term success and investing in companies they can believe in. We also didn’t want to rush to market, like many firms have, and treat ESG as an afterthought,” said Som Seif, CEO and Founder, Purpose Investments. “Our core values have always driven everything we design. Just as value, quality and risk-management are core to what we do, since day one we’ve been planning, researching and developing an ESG approach that would be as ground-breaking as everything else we’ve done.”
Research now shows that when companies proactively manage environmental and social impact with strong governance models, over time, they can outperform those that do not. When Purpose first launched in 2013, the necessary data and research to create a quality, effective ESG approach—with the confidence to avoid a negative impact on returns—simply wasn’t available.
“ESG was a defining project for us. We would be one of the first with this approach and we took the time to get it right,” Seif continued. “It deserved our care and attention—our goal was to embed responsible investing in a way no other firm ever had before. So that’s precisely what we did.”
Purpose’s unique approach started with taking the results of a deep research project to develop a robust way to utilize ESG data. Through years of testing, they designed an effective way to clean the data and apply it in a more nuanced way across the full range of industry sectors. With improved data availability over time, they’re able to now incorporate ESG factors into a set of processes that create a better performance experience for all, avoiding compromise and adding value.
Each of Purpose’s investment strategies has its own approach. Quantitative strategies incorporate ESG into broader factor models alongside existing core factors such as value, quality and momentum. Discretionary strategies integrate ESG into existing investment frameworks, pushing scope further beyond the data found in a company’s financial statements.
Many of Purpose’s core funds, including Purpose Core Dividend Fund (PDF) and Purpose Global Bond Fund (BND), have already incorporated ESG factors into their investment approach.
The majority of Purpose funds, equalling approximately 75% of total assets under management, are already operating with the new ESG framework. The goal is to have it integrated across as much of the fund line-up as possible by the end of 2019.
“ESG is not becoming the sole determinant of investment decisions, but rather part of Purpose’s investing DNA. Investors shouldn’t expect dramatic shifts in short-term performance, but our target is for a positive trend to emerge over time,” added Greg Taylor, Chief Investment Officer. “More information makes for a more robust investment process, better security selection and, ultimately, higher quality long-term returns. More data gives us the ability to make better decisions.”
“We’ve always proactively added modern, trail-blazing approaches to reflect our values and ensure that our core practices measure up to the bar we’ve set for ourselves,” Seif concluded. “Investors shouldn’t have to choose between superior returns and doing the right thing. Today our daily mission has grown to include the proven, high-quality ESG principles we’d always dreamed of bringing to market.”
Purpose is committed to sharing its progress with investors and leading adoption of ESG principles across the investment industry. ESG scores for each fund with available data are now displayed on the company website as a part of its commitment to transparency.
To learn more about Purpose’s ESG approach and for an explanation of our scoring system, visit our ESG page.
About Purpose Investments
Purpose Investments is an asset management company with more than $7.5-billion under management. Purpose Investments is built around the core values of risk management, quality investment strategies, transparency, accessibility and sustainability. Purpose Investments is led by well-known entrepreneur Som Seif and is a division of Purpose Financial, an independent technology-driven financial services company.
For further information please contact:
Matt Padanyi
Purpose Investments Inc.
Tel: (877) 789-1517
Email: info@purposeinvest.com
All data sourced from Bloomberg unless otherwise noted.
The content of this document is for informational purposes only, and is not being provided in the context of an offering of any securities described herein, nor is it a recommendation or solicitation to buy, hold or sell any security. The information is not investment advice, nor is it tailored to the needs or circumstances of any investor. Information contained in this document is not, and under no circumstances is it to be construed as, an offering memorandum, prospectus, advertisement or public offering of securities. No securities commission or similar regulatory authority has reviewed this document and any representation to the contrary is an offence.
Information contained on this page was published at a specific point in time. Upon publication, it is believed to be accurate and reliable, however, we cannot guarantee that it is complete or current at all times. The information provided is subject to change without notice, and updated information can be found on each fund’s specific webpage. Purpose’s ESG policy can be found at https://www.purposeinvest.com/esg.
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