Why might a client concentrate their attention on ESG outliers in fund manager performance assessment?

Concentrating on ESG outliers in fund manager performance assessment is important for several reasons, each of which contributes to a more nuanced understanding of the fund manager's effectiveness in integrating ESG factors into their investment decisions.

Firstly, when clients focus on ESG outliers—companies that exhibit either exceptionally positive or negative ESG performance—they can critically evaluate how well fund managers are implementing ESG considerations. Companies with poor ESG practices may provide tangible examples of the challenges and effectiveness of a fund manager's ESG integration strategies, highlighting potential risks and opportunities that may not be evident through an average performance review. Thus, assessing these outlier cases can reveal a fund manager's ability to manage and mitigate ESG-related risks effectively.

Secondly, giving fund managers the discretion to select which case studies to present can result in a less insightful evaluation process. If fund managers only discuss cases that showcase their strengths or positive outcomes, clients may miss crucial learning opportunities that arise from examining both successful and failed engagements. Outlier cases can provide valuable insights into the complexities of ESG integration, revealing both the successes and complications faced, ultimately leading to a richer understanding of performance and decision-making.

Lastly, focusing on ESG outliers allows clients to hone in on the factors that are most relevant or concerning to them at a particular