Sustainable Finance Disclosure Regulation Disclosures
Integration of Sustainability Risks into Investment Decision-Making Process
As a global macro multi-asset manager, our investment process is rooted in a deep understanding of how economies and markets work. Because environmental, social, and governance dynamics often impact global economies and markets, we deeply research these issues and integrate that research into our investment process in a manner that is consistent with our systematic way of managing money. Our approach seeks to understand how ESG considerations impact the financial objectives of return and risk. As a result, any research insight related to environmental or social issues that we believe would have material impact on financial performance flows through to each portfolio consistent with its objectives.
Our research process is designed to continually adapt to include and prioritize new topics as they arise. The list of environmental, social, and governance dynamics we are looking at, and our assessment of their materiality continues to develop and evolve. Below we provide examples of different ESG topics with clear macro implications that we’ve researched and how we’ve incorporated the insights from that research into our investment decision-making with the aim of increasing returns and reducing risk.
Remuneration Policy
Bridgewater’s remuneration policies are consistent with its approach to the integration of sustainability risks into the investment decision making process. As sustainability risks can be a type of financial risk, Bridgewater acknowledges that failure to consider such risks could have an adverse impact on the performance of investments. Pursuant to its remuneration practices, Bridgewater typically awards fixed and variable remuneration to staff. Variable remuneration is awarded on a discretionary basis and takes into account the performance of an individual employee and the performance of the strategies managed by Bridgewater. Accordingly, to the extent that sustainability risks have an adverse impact on performance of the strategies that Bridgewater manages, this is likely to be reflected in the overall level of variable remuneration awarded to staff.
Principal Adverse Impact Policy
Bridgewater does not consider the principal adverse impacts of investment decisions on sustainability factors as contemplated by article 4 of SFDR, as the nature of these investment products do not provide for the consideration of such adverse impacts. However, as noted above Bridgewater does incorporate so-called sustainability factors that it believes have material financial (risk/return) relevance into its investment process for all products it offers.
Engagement
Bridgewater’s Stewardship and Corporate Engagement Policy is set, implemented, and overseen by the Sustainable Investing Committee, and it covers our approach to proxy voting, corporate engagement, industry collaborations with a broad range of industry actors, including data providers, research institutions, industry partners, and our clients, as well as external affiliations. The policy adheres to the guidelines of the Principles for Responsible Investing (PRI) and aligns with the recommended framework of the Task Force on Climate-related Financial Disclosures (TCFD).