Since the inception of trade, the most important part of investment management strategy has been the singular focus on yielding good financial returns. However, in recent years there has been an emerging commitment to a new world of investing criteria—factors that aspire to harness the investing power of a few large financial service firms to achieve positive societal impact and change in myriad ways. In short, doing well by doing good.
At Amalgamated Bank, incorporating this investing focus of Environmental, Social, and Corporate Governance (ESG) considerations is not new; this theory has long been a bedrock of our investment management philosophy. We’ve always invested in causes that make the world a better place.
As a founding signatory of the United Nations Principles of Responsible Investment, we are committed to evaluating the potential of ESG’s impact in our investment strategies. In the long-term, this holistic awareness can balance more traditional investments in ways that help align our values with our investment portfolios.
We recognize that everyone in the world needs to drink clean water and breathe clean air. We also understand that in many parts of the world, including here in the United States, the fundamental rights to clean air and water are no longer guaranteed—indeed, they are increasingly threatened and at risk.
As of December 31, 2016, Amalgamated Bank is steward to over $41 billion in institutional assets under custody and management and we are in a position to do something positive. That’s why companies held in Amalgamated Bank’s LongView family of funds and investment portfolios will now be encouraged to employ new strategies to reduce waste and lower energy and natural resource consumption. For example, our Low Carbon Equity Index Strategy seeks broad-market U.S. equity exposure while reducing the carbon footprint of client portfolios.
Also, given our success in more traditional sectors, we are now using our shareholder proposal process to inspire, and at times encourage, the implementation of cutting-edge digital technology companies to adopt “net-zero” energy commitments in their day-to-day operations.
Protecting the environment is just one prong in our responsible approach. We have a history of investing time, energy, and capital in social issues like job creation, affordable housing, and other causes we care about, and today this commitment manifests itself in many different ways. For example, even though smoking has long been banned from public spaces, lung cancer is still the most prevalent cancer in the world and is predominantly caused by human behavior.
Our Investment Management division has offered our clients a Tobacco-free investment strategy since 2000, which should be a breath of fresh air for many institutional investors and pension fund managers.
In addition, at a time when critical members of our work force can no longer afford to live in the cities and towns they serve, we are also launching a new initiative that will enable our firefighters, teachers, and police officers to live in new or newly renovated housing across diverse communities.
Similarly, many of the investments we’ve made in the immigrant communities of the past have helped foster the next generation of hard-working Americans. We continue to look beyond our borders for opportunities to make the world a better place. After the horrors of the 2012 Bangladesh garment factory fire, we helped lead initiatives to illuminate unsafe working conditions, and to hold retail companies doing business with these factories responsible for creating new standards of safety and protection.
Amalgamated Bank’s most distinguished and greatest value-add lies in its aggressive good governance practices and an empowering belief we call “active ownership.” With all our holdings, we have a legacy of actively identifying poorly performing or poorly acting companies and proposing reforms to help them improve, identifying market practices that could incur unnecessary risks to safeguard shareholder value, and taking strong and swift action in response to any malfeasance to recover shareholder losses. From Lumber Liquidators to Sketchers to smaller, lesser-known companies, Amalgamated is never afraid to take a principled stand for investors.
Studies confirm what we at Amalgamated have always known: there is a correlation between good governance and good performance. This is why we employ a full range of engagement protocols to persuade and demand the kind of best practices that lead to strong and healthy corporate leadership and a balanced, well-informed decision-making process.
Environmental. Social. Governance. Words we believe in and invest by.
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