Strategy

Great businesses can lower their cost of capital by leading on ESG issues.

We are value investors focused on long-term investment opportunities as well as opportunistic dislocations. We use environmental, social, and governance (ESG) factors to source and underwrite investments.

Through our engagement, we aim to inspire investors and managers to incorporate sustainability into their decisions and to encourage business more broadly to address environmental and social challenges. Great businesses can lower their cost of capital by leading on ESG issues. Conversely, we expect the capital markets to increasingly penalize businesses that do not adequately address material sustainability issues. We seek both to catalyze and capitalize on these developments.

 
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Read our article on ESG for Active Investors in the Journal of Applied Corporate Finance
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Our investments generally fall into one of two areas: ESG Thematic or ESG Operational. ESG Thematic businesses benefit from growth associated with environmental and social megatrends. ESG Operational businesses benefit from improving their performance on material ESG practices relevant to their industries.
ESG THEMATIC

Companies addressing growth trends and societal challenges directly through their products and services, including:

  • Modernization of the electric grid
  • More efficient water treatment and reuse
  • Electrification of transportation; car-sharing infrastructure
  • The spread of educational technology and services
  • Healthier and environmentally better food, production technology, and retail models
  • The move towards outcomes-based healthcare
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ESG OPERATIONAL

Companies addressing societal challenges through their broader business practices, including:

  • Emissions and water intensity
  • Worker safety
  • Supply chain standards
  • Diversity and inclusion
  • Board independence and quality
  • Executive compensation
  • Culture: purpose and clarity
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In all of our investments, we seek to engage with management teams to drive best practices on material sustainability issues, strengthening ESG as a source of long-term competitive advantage.