Where are you?
Objectively analysing corporate sustainability data allows us to identify an uncorrelated source of alpha in publicly listed companies. This informational advantage when applied to a systematic quantitative approach creates investment portfolios that deliver superior risk-adjusted returns over the long-term while significantly reducing their draw on natural resources and so investor’s holdings have a much lower environmental footprint relevant to market benchmarks.
We are convinced that objectively identifying resource efficiency within global large cap companies allows us to target those who have addressed the issues of resource constraint and executed a sustainability program that has delivered to the bottom line. Our research allows us to identify companies whose sustainability programs have not only increased environmental performance but also delivered greater value to shareholders.
Through positive stock selection, we create portfolios of companies which are resource efficient and exhibit additional attractive investment characteristics. We ultimately believe resource efficiency is a proxy for quality. Our portfolios deploy natural stock divestment through the selection of companies that are best-in-class in their economic sector. Inefficient companies are naturally excluded, limiting their access to capital over the longer term if these companies do not improve their resource efficiency.
We believe in being invested across all sectors of the economy in a sustainable fashion delivers much better outcomes. It avoids delivering “greenwash” solutions which only invest in resource light sectors and also manages risk more efficiently delivering mainstream portfolios. This pragmatic approach to sustainability is key to the positive transfer of capital.
We understand the fiduciary responsibility of our clients is to generate long-term capital growth, but that capital must be deployed where it also mitigates future risks. Return and responsible investing should not be mutually exclusive.
Resource efficiency is a relative observation. As corporates become more aware of the benefits of driving efficiency and compete to monetise efficiencies through to the balance sheet, companies, shareholders and the environment will all ultimately benefit.