Rise to the challenges of a changing world
Environmental, social and governance (ESG) factors represent not only risks for investors, but also opportunities, as companies rise to the challenges of a changing world. A ‘best-in-class’ approach to European equity investing seeks to manage the risks, capture the opportunities and contribute to positive change.
Invest in sustainable European companies
Europe Sustainable Equity Fund seeks to identify sustainable leaders with attractive potential returns. We use a four-step approach to build a sustainable portfolio designed to align with our clients’ values and deliver long-term capital growth.
Exclude unsustainable industries
We systematically exclude certain industries to reflect our clients’ values.
Exclude unsustainable companies
We exclude companies that breach norms or that we identify as sustainability laggards.
Identify sustainable leaders with strong fundamentals
We use quantitative research, fundamental analysis and engagement to seek best-in-class companies.
Engage on material issues
We engage to establish best practice, promote ongoing improvements and encourage positive change.
Greenwashing: Separating fact from fiction
Greenwashing is the practice of deceptively marketing a company’s activity and practices as environmentally friendly. As investors become more environmentally conscious, greenwashing has become more common among companies seeking to raise more funds, more cheaply, and lower their cost of capital.
We address the risk of greenwashing in two ways:
Verification of hard data: In the oil & gas sector, for example, it is very common for companies to promote their investment in low carbon energies when this represents a very small proportion of their capex – still less than 1% for the sector overall. Looking at the data beyond the marketing is vital.
Engagement: Company meetings allow us to gauge executive buy in, which we view as a key indicator of the integration of sustainability into corporate strategy. We look for strong board knowledge, rather than delegation to sustainability experts, and for sustainability metrics to be embedded in compensation structures.