Northern Trust Wealth Management: Empowering Sustainable Investing with ESG Integration and Superior Reporting
Throughout 2022, Northern Trust Asset Management (NTAM) continued its expansion of sustainable investment solutions, introducing a range of innovative pooled vehicles designed for global investors. In the EMEA markets, the team initiated the launch of two global bond ESG funds: the Global Bond ESG Climate Index Fund and the NT Global 1-5 Years Bond ESG Climate Index Fund. These funds specifically target issuers identified by portfolio managers as better positioned to handle financially significant ESG risks and make the transition to a low-carbon economy.
The Sustainable Global Developed Real Estate vehicle underwent a methodology enhancement during the year, incorporating insights from the NTAM ESG Vector ScoreTM, a proprietary assessment tool evaluating financially significant ESG analytics. In the U.S. market, Northern Trust introduced an emerging markets fund through its FlexShares ETFs, utilizing the Northern Trust ESG Vector ScoreTM. This fund complements a suite of capabilities spanning equity and corporate-fixed-income asset classes, featuring a robust climate overlay aiming for a substantial reduction in aggregate carbon emissions relative to benchmarks, alongside an overall improvement in carbon risk rating.
Within the Asset Servicing business, Northern Trust strives to support clients in meeting their sustainable investment goals by enhancing transparency and addressing evolving regulatory requirements. Across its various businesses, the company integrates analytics and tools into client disclosures and publications, particularly for institutional clients. To aid clients in managing ESG and climate risk oversight and governance programs, the Asset Servicing business provides a suite of solutions, including:
Portfolio Manager Support: Focused on the front office and portfolio management process, this service integrates ESG throughout the research management, idea generation, portfolio construction, and risk management lifecycle. The technology-based solution adapts to the portfolio manager's process, digitizing it and systematically incorporating ESG data and decision-making. The seamless integration of multiple data sources allows managers to identify and scale their best ideas with an ESG lens, resulting in a measurable and repeatable ESG investment process with comprehensive reporting capabilities for investors and regulators.
Compliance Monitoring: This service enables clients to track the compliance of individual investment managers or programs against their ESG-focused mandates. It identifies breaches by flagging investments in companies generating revenue from restricted areas or falling below specified ESG ratings thresholds.
WEALTH MANAGEMENT
Northern Trust Wealth Management aims to lead the way in empowering clients to integrate their environmental, social, and governance (ESG) investment objectives without compromising financial goals. We guide clients in assessing ESG risk exposures and assist families and institutions in establishing ESG-related investment guidelines in line with our fiduciary heritage.
The incorporation of sustainable investment objectives, whether geared towards benefiting the planet, people, or processes, is increasingly becoming a priority for many investors. Northern Trust provides an extensive range of solutions and resources to meet the growing demand among investors to align investment strategies with their values.
Within a goals-based framework, we assist investors in achieving sustainable objectives through carefully selected ESG investment products and offer superior evaluation and reporting capabilities. Our commitment is straightforward yet impactful: We strive to ensure that ESG-labeled products fulfill their promises by meeting each client's needs and upholding Northern Trust's high expectations for investment performance.
Our ongoing collaboration with a leading ESG data provider allows us to analyze ESG products or client portfolios, providing valuable insights. This capability enhances the client experience by offering a better understanding of their exposure to key ESG risks and opportunities.
Furthermore, we actively share analytics derived from a diverse range of data, platforms, and reporting tools. This sharing enables investors to monitor the evolving impact of their investment portfolios by providing a comprehensive set of ESG indicators.
The Sustainable Global Developed Real Estate vehicle underwent a methodology enhancement during the year, incorporating insights from the NTAM ESG Vector ScoreTM, a proprietary assessment tool evaluating financially significant ESG analytics. In the U.S. market, Northern Trust introduced an emerging markets fund through its FlexShares ETFs, utilizing the Northern Trust ESG Vector ScoreTM. This fund complements a suite of capabilities spanning equity and corporate-fixed-income asset classes, featuring a robust climate overlay aiming for a substantial reduction in aggregate carbon emissions relative to benchmarks, alongside an overall improvement in carbon risk rating.
Within the Asset Servicing business, Northern Trust strives to support clients in meeting their sustainable investment goals by enhancing transparency and addressing evolving regulatory requirements. Across its various businesses, the company integrates analytics and tools into client disclosures and publications, particularly for institutional clients. To aid clients in managing ESG and climate risk oversight and governance programs, the Asset Servicing business provides a suite of solutions, including:
Portfolio Manager Support: Focused on the front office and portfolio management process, this service integrates ESG throughout the research management, idea generation, portfolio construction, and risk management lifecycle. The technology-based solution adapts to the portfolio manager's process, digitizing it and systematically incorporating ESG data and decision-making. The seamless integration of multiple data sources allows managers to identify and scale their best ideas with an ESG lens, resulting in a measurable and repeatable ESG investment process with comprehensive reporting capabilities for investors and regulators.
Compliance Monitoring: This service enables clients to track the compliance of individual investment managers or programs against their ESG-focused mandates. It identifies breaches by flagging investments in companies generating revenue from restricted areas or falling below specified ESG ratings thresholds.
WEALTH MANAGEMENT
Northern Trust Wealth Management aims to lead the way in empowering clients to integrate their environmental, social, and governance (ESG) investment objectives without compromising financial goals. We guide clients in assessing ESG risk exposures and assist families and institutions in establishing ESG-related investment guidelines in line with our fiduciary heritage.
The incorporation of sustainable investment objectives, whether geared towards benefiting the planet, people, or processes, is increasingly becoming a priority for many investors. Northern Trust provides an extensive range of solutions and resources to meet the growing demand among investors to align investment strategies with their values.
Within a goals-based framework, we assist investors in achieving sustainable objectives through carefully selected ESG investment products and offer superior evaluation and reporting capabilities. Our commitment is straightforward yet impactful: We strive to ensure that ESG-labeled products fulfill their promises by meeting each client's needs and upholding Northern Trust's high expectations for investment performance.
Our ongoing collaboration with a leading ESG data provider allows us to analyze ESG products or client portfolios, providing valuable insights. This capability enhances the client experience by offering a better understanding of their exposure to key ESG risks and opportunities.
Furthermore, we actively share analytics derived from a diverse range of data, platforms, and reporting tools. This sharing enables investors to monitor the evolving impact of their investment portfolios by providing a comprehensive set of ESG indicators.
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