Our Beliefs

Our responsible investment process, ESGC Investing™, is derived from our core beliefs about the world and how investing relates to that world as it changes from a relatively wasteful society to one of greater consideration of the environmental, social, governance, and carbon performance of corporate activity.

Core Belief #1: Responsible investment is best practice risk management.

Responsible investment practices, when combined with traditional financial criteria, in our opinion, are the best set of investment screens to manage the many risks involved with client portfolios. We believe companies who excel in all these areas are much less prone to lawsuits, fines, and irreversible public relations damage. In short, they are better managed.

Core Belief #2: Returns from responsible investment are as good or better than traditional investment.

There are many studies on responsible investment. Our research indicates this method of investing provides returns as good traditional investing. A common misconception among many is that responsible investment requires the investor to accept lower returns. The research indicates otherwise.

Core Belief #3: Economic prosperity and environmental health go hand in hand.

The environment is the only supplier of the resources we need on this planet. It follows that we should take care of it if we wish to have good supplier relations. As has been demonstrated many times, firms that focus on preserving the environment through less waste, resource efficiency, and the intelligent use of life cycle design not only save money and produce higher profits, they are also better stewards of our environment. Economic prosperity and environmental health are not mutually exclusive, they are intertwined.

Core Belief #4: Resource efficiency is no longer a choice.

There are almost 7 billion people on this planet. Many commodities are becoming scarcer and the trend is inexorably moving towards greater scarcity. Until recently, the world lead a fairly wasteful existence and could afford to be inefficient in its use of many of the raw materials that form the products we use on a daily basis. However, China and India have changed that forever. The future will see more recycling and a call for greater efficiency in the use of everything that is part of the productive cycle.

Core Belief #5: The end of waste.

The era of waste and the throw away society is fast coming to an end. Durability, value, and cradle to grave design and life cycle corporate product responsibility will replace the build it, sell it, and forget it mentality that pervades our industrial manufacturing base. The Earth does not have the landfill room, the resources, or the energy to produce at the western society waste level for everyone on the planet who wants to and can afford that standard of living.

Core Belief #6: Carbon counting will soon be mandatory.

By 2020 there will be few aspects of life that do not involve being accountable for the carbon impact of those activities. By starting now and incorporating those decisions in our everyday lives, including investing for the future, we will be prepared when we no longer have the choice. For those who do not learn, the cost will be massive and for some businesses, terminal. For this reason, we have incorporated carbon screens into our analysis to more fully capture the true risk profile of corporate investments.

Core Belief #7: Global warming and risk management.

Global warming is such a contentious issue. It polarizes people. We look at it differently. First it is only one of our challenges on this planet. Second, it is a Pascalian wager that should be viewed in the context of risk management. If we continue what we are doing and global warming is true then we commit 40% of the Earth's species to extinction and leave a potentially insufferable environment for our progeny. If we change our ways and behave as if global warming is a certainty and it turns out to be a falsehood, then we simply have a more efficient, less polluted, and environmentally sound planet to live on. Seems like an easy decision to us.

Core Belief #8: Massive opportunities for the next 50 to 100 years.

The World will be transitioning away from the current oil/coal/gas energy platform and towards technologies and businesses that emphasize efficiency and zero waste over the current economic structures. In addition, there will be growing pressure from investors for corporations to more fully account for and manage their environmental, social, governance, and carbon performance. From that standpoint it should be evident opportunities for massive increases in wealth will develop and should be taken advantage of in any investment program.

Core Belief #9: Responsible investment is possible now.

The information exists to manage investment portfolios on a responsible basis right now. It simply involves making more informed choices about investments with respect to the risks they entail. None of this is rocket science (well some is). It just takes understanding the financial and non-financial performance of companies.

Core Belief #10: Absolute Return Focus.

We believe that investment managers should take an Absolute Return focus to their investment process. We strive to provide our clients an annual return after fees of at least 8.00% each year and we judge our success by this measure. We contrast this with traditional investment management where the goal is to beat a benchmark by a certain percentage. Better known as Relative Performance, the problem with this approach is that if the benchmark return was negative it is possible the investment manager could still produce negative returns even though they beat their benchmark.