“The opportunity to create economic value through creating sustainable, societal value will be one of the most powerful forces driving growth in the global economy.”  Michael Porter


The ESG industry has grown and changed – we believe that it has moved from a “negative screening” to a more positive approach that favors good companies that can even improve society through shareholder advocacy and lobbying.

We know that sustainability is paramount to investing. Sustainability risks and opportunities are not a separate category of factors to be assessed, in our view. Rather, sustainability challenges are part of the reality in which we all live and operate. As investors, we must find the companies who understand these challenges and opportunities and continue to adapt to these realities to pursue long-term profitability.

And that’s why we use ESG as an arrow in our quiver when we fundamentally analyze a company. It helps us reduce risk in our portfolio – you win by losing less and understanding the ESG makeup of a company can help us avoid large blow ups. For example, ESG does a great job mitigating bankruptcies – 15 out of 17 (90%) bankruptcies in the S&P 500 between 2005 and 2015 were of companies with poor Environmental and Social scores five years prior to the bankruptcies.

Furthermore, we’ve started to not just focus on companies that have, from what we believe, healthy ESG characteristics, but those that have been improving their ESG footprint. This can work as long as the multiple paid for “good” ESG stocks are not excessive and as long as the investor has high conviction that an ESG laggard is on the path to improvement. Energy stocks are a prime example of an industry that has started to revolutionize, holistically, their standpoint on ESG.


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