Products, tools & ownership

ESG integration with ESGintel

Effective ESG integration requires continuous improvement as data availability and best practices evolve. To meet such demands, Invesco launched ESGintel in 2020, our proprietary platform that maintains ESG analysis and is available to all employees.

ESGintel was built by Invesco’s global ESG research team in collaboration with our technology, strategy, innovation and planning (SIP) team providing ESG insights, metrics, data points and direction of change. Investment teams use this tool as an input to their investment processes in a variety of ways. ESGintel provides users with an internal rating, a rating trend and a rank in GICS sectors. Crucially, while there is global centralized support, investment decisions are ultimately made by our investment managers and analysts—the individuals who know their asset classes and sectors best.

By taking a sector materiality focus to select indicators, we ensure a targeted focus on the issues that matter most for sustainable value creation and risk management. The ESGintel framework utilizes many indicators for various ESG topics. This provides a holistic view on how various ESG topics impact companies’ value chains in different ways.

Since its launch, we’ve continued to enhance the ESGintel platform and add underlying data. Of the approximately 45,000 companies with data currently in the system, 16,500 companies have enough ESG data to create an overall ESG rating. For companies where there is insufficient ESG data to create such a rating, we have implemented a suggested rating, projected by reviewing the ratings of similar companies (i.e., the same GICS classification, region and market cap within +/- 20%). Additionally, ESGintel has a built-in active feedback loop to encourage continuous improvement, gathering users’ feedback, including issues, observations and requests on sources, data and methodology.

The ESGintel Framework

ESG Input

Business ethics
Board composition
Capital allocation
Compensation and alignment
Audit and shareholder rights
Social supply chain management

ESG Operations

Energy management
Environmental management system
Circular business model
Toxic emissions
Water management
Employee/management relations
Data privacy and data security
Health and safety
Workforce retention
Diversity

ESG Outputs

Low carbon transition/climate change
Product quality and safety

ESG Value Chain

ESG investing products

Invesco has provided ESG products and solutions for over 30 years, including exclusionary screenings, sustainability-focused solutions, impact investing and broad ESG integration. We deliver these capabilities through equities, fixed income, multiasset, alternatives, real estate, exchange traded funds (ETFs) and custom solutions.

Spotlight on ESG ETFs

We have managed ETFs for 15 years and are a pioneer in the industry, delivering a wide diversity of ETFs to clients because we know one size does not fit all.

Invesco’s suite of ESG ETFs provides clients with a spectrum of opportunity to invest in trends related to the global economic transformation driven by decarbonization and pollution abatement. While the world braves the intensifying threat of flooding, drought, extreme weather events and wildfires, the discussion around sustainability and renewables continues to accelerate. Investors can choose broad exposure to renewable energy and/or water or target specific geographies and sub-sectors within Invesco’s ESG ETFs.

Responsible active ownership and proxy voting

We take our responsibility as active investors very seriously and view proxy voting as an integral part of our investment management responsibilities. Engagement with company management and proxy voting plays a fundamental role in our efforts to help manage, bolster and enhance the value of Invesco clients’ investments. Our investment-led proxy voting approach focuses on protecting clients’ rights and promoting governance structures and practices that reinforce the accountability of corporate management and boards of directors to shareholders. Invesco’s good governance principles outline our views on best practice in corporate governance and long-term investment stewardship.

Engaging companies

Active ownership is an integral part of our investment process at Invesco. We view engagement as an opportunity to encourage continuous improvement, including with regard to ESG issues. To make the most of limited time with management teams, we prioritize ESG risk factors and key issue relevance per internal and external resources.

We also take advantage of Invesco’s scale, which increases the chance of meaningful engagement. We can draw on this collective power to capture management’s attention and use our influence to encourage stronger ESG-related behavior from the firms and entities in which we invest. Overall, our highly active approach of engaging management teams on the importance of ESG helps us achieve our clients’ dual objectives of maximizing return on capital and delivering on ESG principles.

Proxy voting guiding principles

The voting decision lies with our portfolio managers and analysts, with input and support from our global ESG team and Proxy Operations functions, incorporating a number of factors and inputs, including the unique circumstances affecting companies, public disclosures, regional best practices, third-party research and any dialogue we have had with our portfolio companies. Our proprietary proxy voting platform, PROXYintel, facilitates implementation of voting decisions and rationales across global investment teams. We believe our good governance principles, governance structure and processes are designed to ensure that proxy votes are cast in accordance with clients’ best interests. For more information, Invesco’s Policy Statement on Global Corporate Governance and Proxy Voting is available on our Proxy Voting webpage at invesco.com/corporate.