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US Sustainable Equity

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Institutional Strategy > Equity > US Sustainable Equity

US Sustainable Equity

Core equity strategy with a focus on fundamentals-based bottom up research with ESG integration.

  • The team invests in high quality companies with a long term time horizon
  • In-depth proprietary research and analysis is conducted to identify companies demonstrating best-in-class leadership, secularly advantaged growth, balance sheet strength, ESG leadership, valuation metrics and profitability
  • Incorporate ESG criteria as part of the fundamentals-based due diligence process. ESG criteria include workplace policies, sustainable supply chains, product integrity and governance and disclosure, environmental impact and community impact.
  • The investment premise is developed based on identifying the structural advantages of the company’s business and an assessment of the normalized earnings power of its business
  • Valuation discipline at point of entry aims to achieve an attractive risk/return profile

Key Risks

Market Risk: The risk of a change in the value of a position as a result of underlying market factors, including among other things, the overall performance of companies and the market perception of the global economy.
Liquidity Risk: The risk that the portfolio may be unable to sell an investment readily at its fair market value.
Counterparty Risk: The risk that the portfolio may be unable to sell an investment readily at its fair market value.
Operational Risk: The risk of direct or indirect loss resulting from inadequate or failed processes, people and systems including those relating to the safekeeping of assets or from external events.
Currency Risk: Investments in a currency other than the base currency of the portfolio are exposed to currency risk. Fluctuations in exchange rates may affect the return on investment. If the currency of the portfolio is different from your local currency, then you should be aware that due to exchange rate fluctuations the performance may increase or decrease if converted into your local currency.

 

Overview

 

Investment Philosophy

Responsibility is a hallmark of quality; best in class companies considering the environmental, social and governance aspects of their business can produce solid long-term returns. The strategy follows a fundamentals-based bottom-up, valuation-sensitive approach, where ideas are deployed in a diversified portfolio of 30–40 names, targeting long-term returns through stock selection.

 

Investment Process

New Ideas

 

Identify “Best in Class” Companies

 

Validate New Ideas
ESG Criteria

 
 

Prospect List
“Portfolio Inventory” ~170 Securities

Include
 

Develop the
Investment Premise

 

Buy Discipline / Valuation Analysis Risk/Return Profile

 
 

Portfolio 30 to 40 Best Ideas

 

Maintenance Research On Existing Holdings

 

 

New Ideas

  • Extensive internal and external research
  • Financially strong companies in underperforming sectors
  • Must meet minimum financial criteria
  • Sustainable business practices and competitive advantage
 

ESG: Benefits and Impact

Key ESG Criteria: Implications for Sustainable growth and profitability

Environmental Impact Environmental Management System
Water management
Clean tech innovations
Minimize Penalties, Liabilities and Contingencies
More efficient use of resources & reduced costs
Product Innovation & Competiveness
Workplace Policies Employee Health & Safety
Labor Relations
Employee & Board Diversity
Lower Turnover, absenteeism/Higher productivity
Lower Risk & Business Interruption
Attracting and Retaining Talent
Community Impact Human Rights policy
Multi-stakeholder outreach
Biodiversity
“Right to Operate”
Heightened Product Visibility, Customer Loyalty
Improved Corporate Image
Sustainable Supply Chains Supplier standards
Sustainable sourcing
Focus on quality
Efficiency gains
Reliability (minimized supply disruption)
Reduced regulatory risk
Product Integrity Life-cycle analysis
Focus on product quality
Innovative product solutions
Sustainable customer value proposition
Product safety, fewer recalls
Addressing unmet needs in the marketplace
Governance & Disclosure Independent, diverse board
Executive compensation
Political Spending
Improved Oversight, Increased Accountability
Management aligned with shareholder interest
Enhanced Transparency & Disclosure

Management

Ingrid S. Dyott
Co-Portfolio Manager
25 Years of industry experience
23 Years with Neuberger Berman
Sajjad Ladiwala, CFA
Co-Portfolio Manager
26 Years of industry experience
18 Years with Neuberger Berman