ESG (Environmental, Social, and Governance) strategies offer an effective approach for investors who are seeking increased risk mitigation along with the integration of their sustainability and investment objectives. The RAFI ESG Index strategy helps investors achieve the dual objectives of sustainability and long-horizon outperformance by combining traditional ESG metrics with financial discipline and gender diversity measures and with the proven return engine of the Fundamental Index™ approach.
Research shows a positive link between strong financial discipline and increased returns. Financial discipline measures a firm’s commitment to generating sustainable long-term performance rather than making decisions to benefit managers in the short run. Research shows that more-diverse teams lead to better decision making and company performance.