Sustainable Investing
Why do we Invest Sustainably?
Our core view is that sustainable investing shouldn’t be a trade off between sustainability outcomes and financial return; rather it should enhance financial return and create sustainability outcomes.
There are many names for sustainable investing, such as Socially Responsible Investing (SRI), Impact Investing, Responsible Investing and ESG investing (Environmental, Social and Governance).
Instead of getting hung up on labels, we focus on the process and the outcomes. We view ourselves as sustainable investors, striving to invest in a way that is positive for people and planet.
Investing sustainably is important to us because we believe in leaving things better for future generations.
For us this includes:
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Divestment from industries such as fossil fuels to help fight global warming
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A healthier population with longer lifespans
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Energy transition to cleaner power
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Thriving, sustainable cities with strong urban infrastructure
Our Sustainable Investment Process
We use four primary methods in our approach to Sustainable Investment. We believe these four approaches, applied uniquely based on each strategy, provide the best tools to fulfill our dual mission of market or better financial returns for clients and sustainability outcomes for planet and society.
Divesting from industries and companies that are negative for people and planet
We believe that avoiding the most problematic industries and companies helps us avoid stranded assets, such as in the tobacco industry or the fossil fuel industry.
Deep consideration of stranded asset risk, using different revenue screening thresholds for different industries. We are more stringent on oil and gas producers, versus railways which transport oil as one of many products.
Ongoing and active screening of all holdings (passive funds rely on quarterly rebalances of an index).
The primary sustainability benefit is a portfolio with a much lower carbon footprint than a benchmark.
Using Environmental, Social and Governance data in our decision making
We have a proprietary 20 category ESG quality assessment that we conduct on investment opportunities which provides a range of critical inputs in making an investment decision. We avoid providing a numeric ESG “score” to a company, as we fear this creates false precision.
Unlike most funds, we aren’t tied to a third-party industry classification system to make our divestment decisions (e.g., we don’t rely on the Global Industry Classification System).
We have full latitude to consider a whole range of sources, such as the Stockholm Peace Institute and Human Rights Watch.
The sustainability benefit is portfolio of companies that have strong business practices and create positive outcomes around Environmental, Social and Governance factors.
Investing on the basis of sustainability trends, social, industrial, demographic or otherwise
This allows us to take a top-down look at investment opportunities and identify opportunities with large structural tailwinds. For example, healthcare companies will be increasingly important as population ages.
We choose our themes based on both their investment merits, and also their sustainability merits. We are thematic investors, using global mega-trends to identify sustainability tailwinds.
Our main trends are 1) the fight against global warming 2) increasing urbanization and 3) an aging global population. Accordingly, we invest along three themes: Energy Transition, Sustainable Cities and Health and Wellbeing.
The primary sustainability benefit is a portfolio with active exposure to trends that have long-term growth drivers and create positive outcomes for people and the planet.
Entering into a dialogue with companies around improvement on ESG issues
We vote all our proxies to advocate for better environmental, social and governance practices in accordance with our in-house voting policy.
We prefer a targeted approach, where we seek greater disclosure around environmental and social factors, as well as advocating for greater diversity in leadership. Passive funds don’t vote proxies to create sustainability outcomes.
We strive to make deeper change in a targeted number of areas, as opposed to a more broad surface level approach.
We opportunistically partner with other investors and organizations to raise our voice as active owners.
The primary sustainability benefit is an investment manager that is engaging with companies to help facilitate positive change.
Divesting from industries and companies that are negative for people and planet
We believe that avoiding the most problematic industries and companies helps us avoid stranded assets, such as in the tobacco industry or the fossil fuel industry.
Deep consideration of stranded asset risk, using different revenue screening thresholds for different industries. We are more stringent on oil and gas producers, versus railways which transport oil as one of many products.
Ongoing and active screening of all holdings (passive funds rely on quarterly rebalances of an index).
The primary sustainability benefit is a portfolio with a much lower carbon footprint than a benchmark.
Using Environmental, Social and Governance data in our decision making
We have a proprietary 20 category ESG quality assessment that we conduct on investment opportunities which provides a range of critical inputs in making an investment decision. We avoid providing a numeric ESG “score” to a company, as we fear this creates false precision.
Unlike most funds, we aren’t tied to a third-party industry classification system to make our divestment decisions (e.g., we don’t rely on the Global Industry Classification System).
We have full latitude to consider a whole range of sources, such as the Stockholm Peace Institute and Human Rights Watch.
The sustainability benefit is portfolio of companies that have strong business practices and create positive outcomes around Environmental, Social and Governance factors.
Investing on the basis of sustainability trends, social, industrial, demographic or otherwise
This allows us to take a top-down look at investment opportunities and identify opportunities with large structural tailwinds. For example, healthcare companies will be increasingly important as population ages.
We choose our themes based on both their investment merits, and also their sustainability merits. We are thematic investors, using global mega-trends to identify sustainability tailwinds.
Our main trends are 1) the fight against global warming 2) increasing urbanization and 3) an aging global population. Accordingly, we invest along three themes: Energy Transition, Sustainable Cities and Health and Wellbeing.
The primary sustainability benefit is a portfolio with active exposure to trends that have long-term growth drivers and create positive outcomes for people and the planet.
Entering into a dialogue with companies around improvement on ESG issues
We vote all our proxies to advocate for better environmental, social and governance practices in accordance with our in-house voting policy.
We prefer a targeted approach, where we seek greater disclosure around environmental and social factors, as well as advocating for greater diversity in leadership. Passive funds don’t vote proxies to create sustainability outcomes.
We strive to make deeper change in a targeted number of areas, as opposed to a more broad surface level approach.
We opportunistically partner with other investors and organizations to raise our voice as active owners.
The primary sustainability benefit is an investment manager that is engaging with companies to help facilitate positive change.