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Sustainable investments

Sustainable investments. Sustainability Framework for Investors. Lysis Bourget- Vennin Suday Jain Vanessa Caron Jimmy Huang. Agenda. Defining sustainability – Market angle Our definition Sustainable Investment strategy Evaluation of the Funds Conclusion.

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Sustainable investments

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  1. Sustainableinvestments Sustainability Framework for Investors Lysis Bourget-Vennin Suday Jain Vanessa Caron Jimmy Huang

  2. Agenda • Definingsustainability – Market angle • Our definition • SustainableInvestmentstrategy • Evaluation of the Funds • Conclusion

  3. DefiningSustainability – Market angle sustainabilitymeansmakingeverydaybetterfor people and the planetthrough how weinnovate and how weact. – P&G principleof a triple-bottom-line. This meansmanagingouroperations and growth plans in a waythatenhances social and economicbenefits, whilestriving to minimize the environmentalimpact associatedwithdevelopment. - Suncor committed to developing the most efficient power systems in the world. This helps the environment and ourcustomers by enablingthemto do more, usingless. –Rolls Royce • sustainableinvestmentmeanstakingaccount of environmental, social and governancefactors - known as ESG - across all ourday-to-dayinvestment business. - CalPERS Weviewsustainabilityfromtwo perspectives: one, as a valuabletooland skill set weofferour clients, from life cycle analysis to reducingenvironmental impact to communityengagement; and two, as the mostcompellingway to conductourselvesprofessionallyand live up to ouremployees’ expectations –SNC Lanvlin Manifacturingsustainability - beyondgreen - GE

  4. Sustainability - revisited • Input and outputs are not beingdepleted over time • 3 factors or equalimportance: Environmental, social, and governance. • Long-term vision for innovation and growth, consideration for the future

  5. Environment, social and governance, or ‘ESG,’ performance, iswheresustainability and capital markets converge.

  6. SustainableInvestmentStrategy

  7. Investmentstrategy- Criterias • Interdependence of ESG factors • No tradeoffsbetweenfinancialreturns and ESG performance • Morallyconscientiousinvesting • Financial critieria: Benchmark, expense ratio, turnover ratio, asset class, total rate of return, confidence intervals

  8. Environmentalsustainability, social responsibility, and good governance are interdependent • Environmental • sustainability Social Responsibility Good Governance

  9. No tradeoffsbetweenfinancial performance and esg • Sustainabilityis the root of innovation • Correlationbetweenfinancial performance, not causation • Equalweights for bothfinancial data and ESG

  10. MorallyConscientiousInvesting • Consulting a moral stance on the question of humanfreedom and autonomy, webelieve: • Weshould focus efforts towardsinvesting in companiesthatpromotes the prevention of negativeexternalities • Weshould not bedivesting in companiesthatoffersociallyirreesponsiblegoods and services

  11. Morallyconscientiousinvesting • No judgement on whatactivities free agents should or should not engage in because: • There is no quantitative method to measureharm • Undermineshumanagency and autonomy • Sustainable efforts should not bebased on arbitrary values whichinvestors impose onto others • Focus on preventingharmoriginatingfrom • an external source

  12. Financial Criteria • Benchmark • Expense Ratio • Turnover Ratio • Asset Class

  13. Abbe sri fund

  14. 3-year rate of return: -10.04% • 3-year benchmark (Russell 2000 index): -9.35% • Expense Ratio: 1.25% • Turnover Ratio: 252% • Asset Class: Small Growth

  15. Winslow green growthfund

  16. 3-year rate of return: -26.69% • 3-year benchmark (Morningstar Small Cap Core): -12.28% • Expense Ratio: 1.20% • Turnover Ratio: 113% • Asset Class: Mid-Cap Growth

  17. Calvert social investmentequityfund

  18. 3-year rate of return: -3.68% • 3-year benchmark (S&P 500): -15.43% • Expense Ratio: 0.67% • Turnover Ratio: 51% • Asset Class: Large Growth

  19. Confidence INTERVAL testing

  20. Our recommendation • Calvert Social InvestmentEquityFund

  21. Key points • Sustainableinvestmentsincorportate ESG performance withfinancialreturns, withouttradeoffs. • Environmental and social leadership is compatible with profit. Calvert shows commitment to ESG and strongfinancial performance. • High performingfundwithlowriskensuresfinancialstability and thussustainability.

  22. Thankyou. • Questions?

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