Environmental, Social and Governance (ESG)

    There is growing evidence that suggests that Environment, Social and Governance (ESG) factors, when integrated into investment analysis and decision making, may offer investors potential long-term performance advantages.

    ESG factors offers Fincorp Capital added insight into the quality of a company’s management, culture, risk profile and other characteristics. As the chart below suggests, a company’s ESG activities have the potential to positively impact its financial performance over the long term.

    Area of focus

    Activity

    Potential impact on financial performance

    Environment

    • Resource management and pollution prevention

    • Reduced emissions and climate impact

    • Environmental reporting/disclosure

    • Avoid or minimize environmental liabilities

    • Lower costs/increase profitability through energy and other efficiencies

    • Reduce regulatory, litigation and reputational risk

    • Indicator of well-governed company

    Social

    Workplace

    • Diversity
    • Health and safety
    • Labor-Management relations
    • Human rights

    Product Integrity

    • Safety
    • Product quality
    • Emerging technology issues

    Community

    • Impact
    • Community relations
    • Responsible lending
    • Corporate philanthropy

    Workplace

    • Improved productivity and morale
    • Reduce turnover and absenteeism
    • Openness to new ideas and innovation
    • Reduce potential for litigation and reputational risk

    Product Integrity

    • Create brand loyalty
    • Increase sales based on products safety and excellence
    • Reduce potential for litigation
    • Reduce reputational risk

    Community Impact

    • Improve brand loyalty
    • Protect license to operate

    Corporate Governance

    • Executive compensation

    • Board accountability

    • Shareholder rights

    • Reporting and disclosure

    • Align interests of shareowners and management

    • Avoid negative financial surprises or “blow-ups”

    • Reduce reputational risk
    Globe