Sustainable Finance Disclosure Regulation Disclosures
Integration of Sustainability Risks into Investment Decision-Making Process
As a global macro multi-asset manager, our first investment goal is to build a deep understanding of how economies and markets work. Because issues relating to environmental, social, and governance dynamics often impact global economies and markets, we have made it a priority to deeply research these issues and to integrate that research into our investment process in a manner that is consistent with our systematic way of managing money. 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 portfolio objectives.
We seek to deeply understand these topics by studying them as an integrated part of our research process and prioritize topics that we believe are most pertinent to our macro investment approach, in other words, those topics we think have material financial (return/risk) relevance to our portfolios. As new understanding is uncovered, we seek to systemize and incorporate it into Bridgewater’s broader understanding of how markets and economies work and utilize it to trade markets.
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 has implemented a Stewardship and Corporate Engagement Policy which sets out how it integrates shareholder engagement in its investment strategy, which includes engagement with investee companies where sustainability risks and/or opportunities for improvement are identified.