Impact Blog
A closer look at the Calvert Research System

The views expressed in these posts are those of the authors and are current only through the date stated. These views are subject to change at any time based upon market or other conditions, and Calvert disclaims any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions for Calvert are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Calvert fund. References to individual companies for Engagement or Research purposes are provided for illustrative purposes only and may not be representative of the results of all of Calvert’s engagement efforts. The discussion herein is general in nature and is provided for informational purposes only. There is no guarantee as to its accuracy or completeness. Past performance is no guarantee of future results.

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      By Jessica Milano, Director of ESG Research, Calvert Research and Management

      Washington - At the US SIF annual conference this week, I'll be a part of a panel examining environmental, social and governance (ESG) practices in fixed income and equity investments. We're happy to again be a part of this important week -- Calvert has been part of US SIF's history and development from the earliest days and has served as a sponsor of US SIF's annual conference since the inaugural event in 2011.

      One topic that is sure to come up throughout the three-day conference is the importance of research. Calvert's proprietary research system is a core aspect of our responsible investment process and one of our Four Pillars of Responsible Investing. It is designed to capture the most material ESG criteria from multiple data sources to help us rate and rank companies across both equity and fixed-income portfolios. We believe the most relevant ESG criteria for any given industry or company are those that are financially material to business outcomes.

      Calvert's ESG research process has three components:

      • Structural: We assess companies on their management and disclosure of ESG issues material to their sub-industry. This is a longer-term assessment of management's intentionality to address material ESG risks
      • Product impact: We evaluate whether the company has specific products, services, or business practices that may have significant impact on the company itself, society or the environment.
      • Circumstantial: Finally, we examine recent news about the company related to its involvement in ESG-related controversies, taking into consideration the financially material and societal impacts of the controversies, as well as the directness of the company's involvement and the adequacy of the company's response. This is a shorter-term measure of a company's implementation of processes to manage ESG risks.

      The result of this research is a customized scoring model that ranks companies by sub-industry, using what we believe to be the best available information. Calvert ESG analysts further evaluate these scores, drawing upon their deep sustainability expertise.

      Bottom line: We believe the Calvert Research System differentiates us from many other ESG investment managers in its depth of coverage, focus on materiality and inclusion of comprehensive, diverse data sets.