AQR is committed to helping our clients achieve their ESG goals. We seek to integrate ESG in both our asset selection and our ownership decisions. 

 


Across the firm, E, S, and/or G-related signals are actively integrated in the majority of our portfolios. We also offer dedicated ESG solutions. These include Sustainable strategies that incorporate negative screens and positive tilts, portfolios customized with our clients to address specific ESG priorities, and, in support of the goals of the Paris agreement, portfolios targeting substantial carbon reduction.

To learn more about ESG investing, visit our Learning Center here. 

Our Reports & Policies


ESG Annual Report

As part of our commitment to ESG, we release an annual report that details our yearly ESG developments and progress, as well as outlining our ESG approach, governance structure, and dedicated resources.

View Report

ESG Policies

AQR Proxy Voting Policy 

For commingled client assets, AQR takes a sustainable approach to proxy voting in order to promote sustainable practices in portfolio companies. Review our procedures for and approach to proxy voting.

AQR Engagement Policy

Explore our Engagement Policy, which is grounded in our fundamental belief in open dialogue and transparency, as well as our conviction that improvements in corporate governance are paramount in well-functioning capital markets.

AQR Responsible Investment Policy
Review our approach to responsible investment and our guidelines relating to ESG. 

Our ESG Research

ESG is an important part of our research agenda. Explore our published research and insights in this area:

Supply Chain Climate Exposure
To manage climate risks, investors need reliable climate exposure metrics, but such risks may be difficult to measure, particularly along the supply chain. Using broadly accessible data, we propose an intuitive metric that quantifies the exposure a company has to customers and suppliers. Our metric is related to scope 3 emissions and captures the strength of economic linkages as well as the overall climate exposure of a firm’s customers and suppliers.

Looking Forward with Historical Carbon Data
Increasingly many allocators are interested in computing their portfolio’s carbon footprint. We show that historical emissions data are useful despite a substantial 1-2 years’ lag typically to when investment portfolios are built.

(Car)Bon Voyage: The Road to Low Carbon Investment Portfolios
We discuss how an investment portfolio could dramatically reduce its carbon footprint, potentially even achieving a ‘net zero’ carbon footprint. We discuss the pros and cons of techniques to achieve carbon reduction goals, including security selection, shorting high carbon footprint companies, and trading instruments such as carbon offsets and carbon permits. 

Industry Engagement

AQR participates in the sustainable investment community, with colleagues serving on ESG-related working groups of numerous industry associations across geographies. AQR has been a signatory to the UN PRI since 2014, and we are in fact close collaborators. In 2019, AQR and PRI co-created a framework for Responsible Investing, and AQR colleagues have served on several PRI working groups and committees. Additionally, AQR has been a supporter of the Task Force on Climate-related Financial Disclosures (TCFD) since 2018, and a CDP investor signatory since 2020. AQR is also a founding member of the MIT Aggregate Confusion Project, an initiative which aims to improve ESG measurement.

Certified Carbon Neutral

AQR has chosen to offset our emissions since 2019, and since 2021 we have been a CarbonNeutral® certified company. For the first time in 2022, a third-party consultant, RSK, reviewed AQR’s GHG assessment calculations. Our carbon offset efforts span all offices globally and include emissions related to business travel and homeworker emissions. 


Corporate Sustainability

AQR is committed to promoting sustainability and social responsibility, and we have a number of initiatives supporting these efforts within our operations and in our community. Through ESG in the Office, we strive to create a more sustainable workplace through education, conservation, and innovation. Our ESG in the Office Committee brings together colleagues from across the firm to enhance the management of ESG in our own business practices. This initiative has several areas of focus, including reducing the consumption of single-use non-recyclable material, organizing environmental volunteer projects for employees, reducing our carbon footprint, and offsetting what we cannot eliminate. 

 

ESG in the Office

We strive to create a more sustainable workplace through education, conservation, and innovation. Our ESG in the Office Committee began as an employee-originated initiative, bringing together colleagues from across the firm to enhance the management of ESG in our own business practices. This initiative has several areas of focus, including reducing the consumption of single-use non-recyclable material, organizing environmental volunteer projects for employees, reducing our carbon footprint, and offsetting what we cannot eliminate. These efforts helped the firm offset 100% of our global carbon footprint internally. 

Learn More

*As of September 30, 2023, ~80% of AQR’s assets under management integrated ESG-related alpha or risk signals. We include ESG-related signals in our multi-factor security selection models as standard, and have since AQR’s inception; in all portfolios, we will incorporate ESG to the extent that we believe it improves the risk/return profile, consistent with our research on the ESG-efficient frontier. 

**As of the same date, AQR managed ~$19 billion  in dedicated ESG solutions, designed in service of our clients’ ESG-related objectives. Portfolios managed according to our standard ESG process target significant carbon reductions in long-only and relaxed constraint accounts and net zero carbon exposure in long-short portfolios, avoid companies with the largest ESG risk exposures by imposing static and dynamic exclusions, and target an improvement in portfolio ESG profile. In relaxed constraint and alternatives portfolios, we may actively short the worst ESG offenders. We currently offer this process for equity, multi-strategy absolute return, and total return portfolios. 

Learn more about ESG Investing at AQR

Contact Us

This document has been provided to you solely for information purposes and does not constitute an offer or solicitation of an offer or any advice or recommendation to purchase any securities or other financial instruments and may not be construed as such. The factual information set forth herein has been obtained or derived from sources believed by the author and AQR Capital Management, LLC (“AQR”) to be reliable but it is not necessarily all-inclusive and is not guaranteed as to its accuracy and is not to be regarded as a representation or warranty, express or implied, as to the information’s accuracy or completeness, nor should the attached information serve as the basis of any investment decision. This document is intended exclusively for the use of the person to whom it has been delivered by AQR, and it is not to be reproduced or redistributed to any other person. The information set forth herein has been provided to you as secondary information and should not be the primary source for any investment or allocation decision. Past performance is not a guarantee of future performance. 

This material is not research and should not be treated as research. This paper does not represent valuation judgments with respect to any financial instrument, issuer, security or sector that may be described or referenced herein and does not represent a formal or official view of AQR. The views expressed reflect the current views as of the date hereof and neither the author nor AQR undertakes to advise you of any changes in the views expressed herein. 

The information contained herein is only as current as of the date indicated, and may be superseded by subsequent market events or for other reasons. Charts and graphs provided herein are for illustrative purposes only. The information in this presentation has been developed internally and/or obtained from sources believed to be reliable; however, neither AQR nor the author guarantees the accuracy, adequacy or completeness of such information. Nothing contained herein constitutes investment, legal, tax or other advice nor is it to be relied on in making an investment or other decision. There can be no assurance that an investment strategy will be successful. Historic market trends are not reliable indicators of actual future market behavior or future performance of any particular investment which may differ materially, and should not be relied upon as such. 

The information in this paper may contain projections or other forward-looking statements regarding future events, targets, forecasts or expectations regarding the strategies described herein, and is only current as of the date indicated. There is no assurance that such events or targets will be achieved, and may be significantly different from that shown here. The information in this document, including statements concerning financial market trends, is based on current market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons. 

 

Sustainable investing is qualitative and subjective by nature, and there is no guarantee that the environmental, social and governance (“ESG”) criteria utilized, judgment exercised, or techniques employed, by AQR will be successful, or that they will reflect the beliefs or values of any one particular investor. Certain information used to evaluate ESG factors or a company’s commitment to, or implementation of, responsible practices is obtained through voluntary or third-party reporting, which may not be accurate or complete. ESG investing can limit the investment opportunities available to a portfolio, such as the exclusion of certain securities or issuers for nonfinancial reasons and, therefore, the portfolio may perform differently than or underperform other similar portfolios that do not apply ESG factors.

The information set forth herein has been obtained or derived from sources believed by AQR Capital Management, LLC (“AQR”) to be reliable. However, AQR does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness, nor does AQR recommend that the attached information serve as the basis of any investment decision. This document has been provided to you solely for information purposes and does not constitute an offer or solicitation of an offer, or any advice or recommendation, to purchase any securities or other financial instruments, and may not be construed as such. This document is intended exclusively for the use of the person to whom it has been delivered by AQR and it is not to be reproduced or redistributed to any other person.Past performance is not a guarantee of future performance. 

There can be no assurance that an investment strategy will be successful.

The investment strategy and themes discussed herein may be unsuitable for investors depending on their specific investment objectives and financial situation.

© 2022 AQR Capital Management, LLC. All rights reserved.