Environmental, Social, and Governance Strategy and Reporting at a Medium-Sized Alternative Asset Management Firm

Abstract

A medium-sized power generation and real estate management firm, Harbert Management Corporation (HMC), is increasing its environmental, social, and governance (ESG) responsibility reporting. Exploring HMC’s history and the general landscape of ESG reveals relevant information related to their reasoning for improving their ESG reporting. Examining relevant research has revealed three relevant observations: • Alternative asset management firms that use certain reporting structures show better ESG performance. • Different asset classes have different average integration of ESG in their practices. • Larger asset management firms tend to have higher levels of ESG integration. Nonetheless, this information is purely correlational, and the causes for these results may be due to different reasons. Comparing HMC’s approach to ESG reporting and inquiring about how they decided to pursue the reporting approach that they chose, the determining factors align with the common motivators for other firms integrating ESG into their practices. Ultimately, factors including the methods which they chose to report, feedback from GRESB and UNPRI, and the interests of various stakeholders show reasons to believe that HMC’s ESG integration may continue improve over time.