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
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New Ideas Identify “Best in Class” Companies Validate New Ideas Prospect List Include
Develop the Buy Discipline / Valuation Analysis Risk/Return Profile Portfolio 30 to 40 Best Ideas Maintenance Research On Existing Holdings
New Ideas
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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
Daniel Hanson, CFA
Related News & Insights
The Active Foundations of Sustainable Investing
- As ESG and sustainability indices proliferate, we argue that sustainable investing is inherently an active management discipline.
The True Meaning of Sustainable Investing
- (19:50) How can investors approach sustainable investing in today's investment landscape?
Why Passive ESG Fails to Deliver
- There’s no substitute for nuanced analysis and judgment in ESG investing.