Yield. Valuation. Fundamentals.
DePrince, Race & Zollo (DRZ) is a signatory to the United Nations supported Principles for Responsible Investment (PRI). As a signatory, DRZ is committed to incorporating important Environmental, Societal, and Governance (ESG) considerations into our investment process. These considerations include the following:
Environmental: Emissions levels, pollution levels, carbon footprint, and recycling.
Societal: Labor practices, community responsibility and accountability, and health and safety standards and practices.
Governance: Board and employee diversity, compensation policies, and legal /antitrust policies and compliance.
ESG is no longer just another investment consideration. It is an important component of the investment process and its implementation is now a priority for Fiduciaries. We believe ESG due diligence is an important part of risk control and can help contribute to excess returns.
DePrince, Race & Zollo recognizes that issues related to the environment, governance, public health and safety, employees and other stakeholders affect the performance of publicly traded equities. We believe that incorporating a review of these ESG factors as part of the firm’s bottom-up fundamental research augments our investment process and is consistent with our investment goals, objectives and duties as a Fiduciary. Ultimately, superior investment performance remains our principal goal and we believe identifying and understanding ESG factors and risks increases our ability to achieve that goal for our clients.
Please click HERE for a copy of DRZ’s ESG Compliance Policy.
Our ESG analysis incorporates ESG scores from independent outside providers (MSCI, Bloomberg, and/or Glass Lewis) for each company in our investible universe. This helps to identify ESG outliers and complements our own individual company ESG evaluations. Securities that are considered ESG outliers are subjected to increased scrutiny and analysis. This includes a detailed analysis of which ESG factors are deficient, the company’s history in this area and plans to address and improve.
DRZ’s bottom-up research process includes an ESG analysis. This analysis includes examining the resources and efforts necessary to achieve ESG initiatives, the materiality of a company’s efforts to incorporate ESG factors into their initiatives, and the company’s transparency in publicly disclosing information regarding management’s ESG practices and policies.
Before any individual security can be purchased in a DRZ portfolio, the portfolio manager must affirm to the DRZ Compliance staff that all relevant ESG considerations for that company have been reviewed.
For more details on DRZ’s ESG Compliance Policy and portfolio implementation, please contact our Chief Compliance Officer Adelbert Sanchez at firstname.lastname@example.org.