Sustainable Finance Disclosure Regulation Disclosures
Sustainability risks and promotion of environmental and/or social characteristics in connection with the All Weather Sustainability strategy
Because environmental, social, and governance ("ESG") issues are often important drivers of global economies and markets, Bridgewater (the “Investment Manager”) has made it a strategic priority to deeply research these issues and to integrate that research into its investment process in a manner that is consistent with its systematic way of managing money. For portfolios with traditional return and risk objectives, the Investment Manager may incorporate ESG considerations that it believes have financial (risk/return) relevance to those portfolios into its broader investment process in an effort to achieve return and risk objectives that are consistent with the relevant investment strategy.
For portfolios with sustainability goals in addition to traditional return and risk objectives, such as the All Weather Sustainability strategy (“All Weather Sustainability”), we not only consider how ESG-related issues might affect return and risk but also how aligned these portfolios are to environmental and social characteristics. We approach the challenge of sustainable investing in liquid markets by applying Bridgewater’s fundamental, systematic, and diversified approach. Using this approach, we have built a systematic assessment process for evaluating whether instruments are aligned with environmental and social goals. This process assesses the alignment of major public market instruments (across asset classes) to the United Nations ("UN") Sustainable Development Goals ("SDGs"). The SDGs are a collection of 17 global goals set by the United Nations General Assembly for the year 2030 that have been ratified by 193 countries. We have selected the alignment to the UN SDGs as the foundational framework for this approach because they are oriented towards positive environmental and social goals, are widely accepted by governments and asset owners, and contain specific and measurable indicators that help investors and researchers to assess whether a given entity is helping to achieve any of the 17 goals.
Through the application of the approach described above, All Weather Sustainability systematically directs capital toward issuers that are aligned to the SDGs and promotes environmental and social characteristics associated with the SDGs. The Investment Manager has developed a proprietary methodology drawing on a range of internal and external data sources in order to determine the extent to which a security is aligned with the SDGs. Within each asset class, the securities that have the highest level of alignment with the SDGs are kept to constitute a universe of sustainable securities. Further information on this process is provided in our Strategic Report which is made available to investors.
Taking account of the Investment Manager's approach to sustainability risks as described above and the Investment Manager's risk management framework, the Investment Manager seeks to ensure that sustainability risks do not have an overall negative impact on the returns of All Weather Sustainability. While the Investment Manager believes that its investment management and risk management practices are sufficiently robust to prevent sustainability risks from being likely to have a materially negative impact on the returns of All Weather Sustainability, there can be no guarantee of this and no guarantee or representation is made that All Weather Sustainability investment strategies will be successful. The potential for All Weather Sustainability to be impacted by certain risks is set out further in the section "Certain Risk Factors" of relevant offering documents.
Note that the above disclosure language is provided in order to provide information on the Investment Manager’s approach to considering ESG issues for the relevant strategy. Such disclosures are not, and should not be construed to be, an offer to sell or the solicitation to buy securities, investment advice, or a suggestion or recommendation to enter into any investment or trading strategy.