Schroders’ sustainability quotient (SQ)
A look at Schroders’ proprietary approach to assessing sustainability
The Global Sustainable Growth strategy seeks to invest in a small number of truly sustainable businesses where we have high conviction in the long-term outlook. We understand ‘sustainability’ to mean the durability of a company’s business model, or ‘what makes a great company stay great?’. Ultimately, we believe that only companies that are run (a) for the long-term, and (b) with regard to all stakeholders, will be able to maintain supernormal growth and returns. The reward for shareholders comes from the fact that the market is poor at long-term forecasts and analysis of non-financial factors. This means it often fails to differentiate between companies where growth and returns will mean-revert and those where they will persist. This creates an alpha opportunity, as these companies repeatedly surprise positively and ‘beat the fade’, delivering persistent outperformance and long-term compounding returns.
The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.