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The views expressed are those of the author at the time of writing. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional, institutional, or accredited investors only.
At Wellington, we have long believed that strong environmental, social, and governance (ESG) ratings and characteristics can generate value for shareholders and improve a company’s long-term investment performance. We believe this applies broadly across market sectors and have established frameworks — what we call “research playbooks” — for evaluating companies within each sector based on various ESG criteria that we deem to be of material importance.
Here we look at the health care sector, to be followed by other market sectors in future blog posts by our ESG team.
ESG is of course just one input into our investment team’s multi-pronged fundamental analysis of individual health care companies. Having said that, here’s a high-level breakdown of how we prioritize key ESG issues facing the sector:
Digging a bit deeper on particular health care industries, here are some sample “engagement” questions we bring to the table when we speak with medical technology (medtech), pharmaceutical, and managed care companies about their ESG approaches (Figure 1):