A Peak Inside Our Investment Strategy

Going behind the scenes with Sustainalytics, a leading ESG research provider

Sustainalytics’ ESG data is an important slice of Portola Creek’s investment management process.

Sustainalytics provides a valuable set of ESG data for Portola Creek’s Portfolios

We are often asked how we gauge and evaluate the environmental, social, and governance impact of the investments we consider for our client’s portfolios. Admittedly, there’s no single source or simple solution we rely on. For us, it’s important that we understand exactly what data is being gathered and how, as well as the way in which it all ties together. In an effort to provide more insight about our strategy, we are taking this opportunity to introduce one of our key ESG data providers, Sustainalytics.

What is Sustainalytics’ research methodology?

Sustainalytics’ research methodology addresses a broad range of macro-level ESG issues and trends that can impact industries and companies, creating risks and opportunities for investors. Their “Company ESG Reports” highlight indicators that are critical in assessing how well the firms in question manage their exposure to such issues. The reports also include trend signals that detail how things have changed over the course of the previous 12 months.

How does Sustainalytics integrate with Portola Creek?

At Portola Creek, we connect to Sustainalytics’ information through FactSet, the provider of our robust market data dashboard. To better understand companies’ policies, programs and preparedness to manage ESG risks, we use Sustainalytics data to evaluate four distinct management dimensions: disclosure, preparedness, quantitative performance, and qualitative performance.

In compiling their trends and data points, Sustainalytics analysts read through corporate reports and filings in an effort to identify ESG issues that may be affecting a company and others in its industry, and then assign scores to 7000+ securities. Broadly speaking, these readings summarize ESG performance in absolute terms, as well as relative to industry peer groups.

Portola Creek’s pledge to the Principles for Responsible Investing

When we founded the firm and developed our sustainability-focused investment strategy, one of the first decisions we made was to pledge to adhere to the Principles for Responsible Investing, or PRI. Sustainalytics’ data has helped us to remain aligned with our core principles and guidelines.