The longer the time horizon, the more essential it is to integrate environmental, social, and governance (ESG) factors into investment strategies. A leading multi-family office with a focus on multi-generational wealth management is at the forefront of this movement.
Every investor has a fiduciary duty to their clients, but focusing on long-term stability is paramount when working with multi-generational wealth.
“We focus on investing in trust-quality companies, which can be interpreted in different ways, but fundamentally, it means stable growth. Since we manage multi-generational trusts, aiming to build and transfer wealth across generations, we’re inherently looking at long-term investments. This may be similar to other models, but it emphasizes the importance of long-term stability and good governance.
These aspects are closely linked with sustainability; diversity and good governance are integral to this approach. Therefore, our definition of “trust quality” and a good long-term investment is heavily influenced by the nature of our client base and wealth management strategies.”
In this case study, the client will remain anonymous. They use PeopleReturn to enhance their research and decision-making processes with up-to-date, reliable, and high-quality diversity and human capital management data. Their research then fortifies their investment decisions, proxy voting, and shareholder engagement.
Let’s dig into what that looks like:
Where Value-Based Investing Began
“About 40 years ago, we noticed clients wanted to align their portfolios more explicitly with their values. What we now know as responsible or sustainable investing was niche then. Trustees called in a leading expert who founded what is now a prominent sustainable investing firm, a key differentiator for our company.
The firm is wholly focused on sustainable investing. The entire company manages wealth bespoke, but we believe integrating environmental and social factors is crucial for long-term financial performance.
We focus on ESG data research and evaluation, mostly done in-house, avoiding off-the-shelf rankings.”
Additionally, they actively try to drive industry progress through shareholder advocacy and engagement.
Benefits of PeopleReturn: Real-Time Data, Reliability, Quality, Coverage
Before PeopleReturn, the team was using other data providers, which weren’t cutting it.
PeopleReturn has improved the firm’s diversity and human capital management data in five main ways.
Real-Time Updates
“First is frequency. The data is refreshed more often, reducing the lag times we used to have with other vendors.”
Data Reliability and Quality
“Next is the reliability and quality of the data. We no longer need to double-check every data point, which we did with other vendors and often found mistakes. We did diligence on the PeopleReturn data initially, and now we have a high degree of confidence in the data, which is great.
Where other vendors would provide a blanket statement about sourcing, PeopleReturn provides links to the specific data sources for verification. We can always access sources if we need to, the data is high integrity, and this was missing from previous vendors.”
Depth of Coverage
“Next is the depth of coverage. Not just the number of companies but the depth within those companies. For years, we wanted our vendors to share data on more than just board members. PeopleReturn also has full executive teams, which helps us understand if companies are walking the talk.
We also trust how thorough PeopleReturn is in uncovering the self-identification of NEOs and Board Members. There was a time when we relied on Googling people to determine race/ethnicity, and we’re very glad not to have to do that anymore, given how unreliable it is.”
Digest and Dashboard
“We are heavy users of the customized digest. We get a weekly digest of who’s leaving, changing positions, joining a board or NEO team for the companies we care about most. This is such a hard thing to do manually; where do you even start to keep track of all that? This bespoke information was not scalable or manageable before, so it’s been a huge advantage for us.”
In addition to using the weekly digest, they also leverage the PeopleReturn platform.
“PeopleReturn provides both micro-level raw data points, as well as macro trends, themes, and industry insights. Having a partner who pays attention to specific data needs and can provide high-level industry insights is valuable.
As a business, we look at larger trends and very granular data. So, during proxy season, we might be checking leading metrics or indicators that show progress in a sector or industry. Or we may be comparing the diversity and governance details of two companies.
Sometimes, we’ll do a targeted project on the workplace practices of the major employers. We’ll use data to draw insights on best practices and see who’s leading and who’s lagging. Then, we draft campaigns to help the laggards improve.
For proxy voting, we’ll look at diversity statistics and initiatives and then decide to support or oppose members of a nominating committee based on that. This is also why it’s so crucial to have real-time data on changes to board or NEO composition, as this might influence our decisions.
We don’t base proxy decisions on outdated data. This is a big deal for us. Major use cases include keeping up with ESG data and portfolio performance, direct engagement with our companies, and proxy voting.”
Portfolio Management and Data Feed
The firm saves an immense amount of time on research and preparing for proxy voting and engagement every year.
“We used to gather our own data once a quarter. It would take multiple days to get data for our top 50 companies, with questionable results we didn’t trust.
Now, my analyst told me that aside from loving the new dashboard, we also get SFTP data that integrates directly into our internal database. It’s instantaneous. So what used to take days is now automatically ready for us.”
The data feed requests specific data for specific companies, and it pipes directly into their dashboards, saving days of time.
“It’s significant, even without considering the time we’d spend correcting mistakes after the fact.”
The Confidence Of Partnering With PeopleReturn
“If you are in a position where you’re speaking with a company’s leadership team and trying to get them to update their policies, this requires solid data. If they challenge you, you need to be able to back up your points with reliable evidence–not just an old class photo.
So, having confidence and integrity in our research data is crucial. It gives us a lot more confidence when engaging with companies, and that’s a significant impact.”
By providing real-time, reliable, and comprehensive diversity and human capital data, PeopleReturn enhances research, decision-making, and shareholder advocacy efforts.
Partnering with PeopleReturn saves time, ensures data accuracy, and fosters effective company engagement. Their data-driven insights empower stakeholders to uphold long-term investment strategies and fiduciary responsibilities, leading to superior financial and social outcomes.
With PeopleReturn, they are well-equipped to lead in sustainable and responsible investing for generations to come.