Why Sustainable Investing ?
Delivering Net Zero and a greener economy isn’t just an imperative for society, it’s also the premier investment opportunity of our time.
We recognise that avoiding climate disaster is the greatest challenge of our generation & we must be part of the solution
- Current trajectory is ruinous. A 3° global temperature increase will raise the seas, cause more frequent, costly & deadly natural disasters, lead to food/water scarcity for half a billion people, make major cities in the equatorial band unlivable & drive hundreds of millions to migration. Global GDP impact could be >25% by 2100.
- This is already impacting every aspect of our world. Severe weather events have tripled in the last decade & insured losses have risen 8-fold. More than a quarter of our world has experienced moderate to severe land degradation.
- And it’s driving existential changes in our industry. ESG/values assets in ’20 surpassed 20% of total AUM in the US. Global values assets increased by 150%. Asset owners & managers with more than $40trn AUM are actively supporting net zero 2050.
We believe the greening of our economy can also be the most profitable investment opportunity any of us have ever seen.
- Our work: $120Trillion in necessary investments ~ one quarter of all capex FOR THIRTY YEARS.
- Outsized returns will accrue to companies that contribute to the solution – many with new business models, & nascent technologies.
- We’re comfortable working with new and deep trends – it’s what we like most about thematic investing & we’ve been at it for 20 years.
We think new skills are necessary: sustainable investing is vexingly complex – there is no simple algorithm.
- Demographics, technology, regulation, politics & societal attitudes will determine which pathways are investable.
- Forecasting becomes substantially more difficult when the future looks very different from the past.
- There is no perfect solution. Understanding the many trade-offs & time-frames of NZ50 is key.
- Together we have a unique skillset from having worked as civil engineers, consultants, investors, bankers & brokers.
We see tremendous risks too. There will negative returns in many legacy industries & mis-allocated capital in some new arenas.
- Companies will be forced to shoulder the entire cost of their impacts & adapt to new rules. Those that fail to evolve risk stranded assets & diminished returns at best.
- Moving regulatory & policy goal posts are further complexifiers for long term investors.
- Having worked through the internet bubble, the German solar bust & the Asian debt crisis, we’ve seen how hope/FOMO can overcome rational analysis.
We know asset owners & managers have a central role & want to work towards a solution to climate disaster.
- This time it’s different. Our clients are increasingly involved in engaging with companies to drive real change.
- Their challenges are real: providing a competitive return while aligning their portfolios with values.
- And it’s something we understand from having walked in their shoes & having been part of their industry since the mid 90s.
And we believe strongly we can support them.
- We are committed – leaving our previous careers behind & focusing solely sustainable investing.
- We are putting our skills, values and diverse backgrounds to use – backed by 75 years of experience.
- We have the right balance of expertise – theme and valuation experience, a long term investing focus and a passion for sustainability.
- We are independent, work exclusively for our clients and don’t do corporate deals -it’s only way to avoid conflicts of interest.