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Responsible Investing

Cambiar recognizes that Environmental, Social, and Governance (ESG) issues can have an impact on corporate performance and can be important drivers of investment returns – both positive and negative. ESG considerations have long played a role in Cambiar’s evaluation of companies in our investment universe.

We believe a focus on these factors within our formal investment approach will help Cambiar build better investment outcomes; providing clients the best opportunity to perform over time, with greater consistency and less risk.

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Scope

Cambiar searches for quality companies that possess underappreciated catalysts and are trading at an attractive level relative to peers or to the company’s historical normalized valuation ranges. Our integration of ESG factors is intended to be broadly applied to the investment process used across all of Cambiar’s investment strategies. 

Process

Cambiar employs a fundamental, bottom-up relative value process that involves a thorough assessment of a company, including its management and risks.  This assessment considers a number of financial and economic factors, including, among others, a company’s intellectual capital, established infrastructure, and potential positive fundamental developments.  Cambiar’s investment analysts also evaluate the company’s material ESG-related risk exposures and opportunities to determine if those factors could significantly impact—positively or negatively—the company’s performance during the firm’s intended investment horizon. 

In performing the analysis of a company, the Cambiar analyst has the ultimate responsibility to evaluate the materiality of a potential ESG-related risk, whether the company has responded to the ESG issue in a constructive manner (as applicable), how important the ESG factors are on a potential investment decision, and what potential impact they may have on the business and its future return. 

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Governance

Corporate governance has always been an important factor in Cambiar’s qualitative analysis; companies should be led by effective management teams dedicated to maintaining constructive relationships with shareholders. Accounting standards, board composition, balance sheet composition, share ownership and control, among other areas, are common considerations in Cambiar’s analysis.

Environmental

Cambiar considers environmental factors, such as carbon emissions, energy efficiency, and waste management in its analysis of certain companies. For example, as it relates to environmental regulations (e.g., CO2 regulations), Cambiar will consider the failures of companies to adhere to applicable environmental regulations and will evaluate other efforts taken by companies, e.g., innovative technologies, to address the potential impacts that regulations may have on their business.

 

 

Social

Cambiar believes key social factors, such as customer relations, product safety and quality, and labor relations, including the ability/inability to retain key staff and other employees, are critical to the success of a business. We will analyze these, among other metrics, when evaluating companies.

ESG considerations are important factors in assessing companies, but do not by themselves automatically qualify or disqualify companies from our investment universe. Cambiar considers each issuer and its orientation toward ESG factors on a case-by-case basis.

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Engagement

Engaging with corporate management is among the most critical aspects of an effective ESG policy, and Cambiar encourages analysts to discuss ESG issues when opportunities present themselves. Cambiar believes that engagement with issuers promotes two important objectives:

  1. Assisting in developing a holistic investment thesis for the company. Dialogue with management on ESG issues allows analysts to develop a deeper understanding of the existence, materiality, and impacts of ESG considerations.
  2. Engaging on these issues underscores to management the importance of ESG considerations, which, in turn, increases the likelihood of positive outcomes for both investors and other stakeholders.

 

Proxy-Voting

Cambiar seeks to exercise its proxy voting responsibilities in the best interests of its clients, with the goal of maximizing long-term investment performance.

Under our investment discipline, we invest in issuers that we believe are committed to enhancing shareholder value and serving shareholder interests. As such, we generally vote in accordance with the recommendations of company management teams and/or the company’s board of directors. Cambiar may choose to vote against management or the board if, based on our analysis, such an action appears more consistent with the best interests of clients.

Cambiar utilizes a third-party firm to provide proxy research which includes identifying potential material ESG considerations.

 

Responsibility & Oversight

Each member of Cambiar’s research team, including the Chief Investment Officer, is responsible for the day-to-day implementation of the ESG Policy. 

Cambiar has assigned one analyst on both the domestic and international research teams to oversee their team’s application of the Policy. These ESG Leads will assist in formulating and reviewing Cambiar’s ESG Policy, direct the execution of the Policy, including by ensuring that the analysts incorporate an analysis of ESG considerations into their investment theses, recommending additional ESG research or resources, and consulting with the analysts in addressing ESG-related concerns or questions for their respective teams.

Cambiar’s Marketing, Legal and Compliance teams will also assist with the oversight and implementation of the ESG Policy.

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Principle for Responsible Investment

Cambiar is a signatory for the Principles for Responsible Investment, the world’s leading proponent of responsible investment.  As a signatory, we complete the PRI Reporting Framework on an annual basis, or as otherwise required.  This reporting outlines the firm’s efforts in integrating ESG considerations into its investment decision-making process, among other areas.  To learn more, please visit www.unpri.org.

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