Sustainable Investment Management
We seek corporate leaders that make an explicit commitment to sustainable business practices and allocate significant resources to achieve their goals.
Portfolio 21 companies must meet strict requirements regarding their long-term business models and, in our opinion, are best positioned to meet the challenges and risks of a changing global economic era.
Investment Requirements
Companies considered for Portfolio 21 must be publicly traded and meet prudent financial requirements. Of particular interest is the composition of a company's long-term earnings growth. We look most closely at rising trends in revenues and earnings improvements derived from ecologically superior product lines, a sound balance sheet, increasing profit margins, evolving product lines, investments in renewable energy, innovative transportation and distribution strategies, and efficient use of resources with respect to meeting human needs. We seek corporate leaders that make an explicit commitment to these sustainable business practices and have allocated significant resources to achieve their goals.
Managing Ecological Risk
Financial risk is composed of several factors: country and currency risk, industry risk, market capitalization and specific company risk, as well as ecological risks. Portfolio 21 manages portfolio risk through prudent diversification and portfolio positions that are proportionate to a company's market capitalization and exposure to ecological risks.
Global Approach
Portfolio 21 is a global fund with a significant portion of its holdings in international companies. The fund will normally include companies in the United States, the United Kingdom, Europe, Japan, Australia and Canada. Our benchmark is the MSCI World Equity Index, which is a widely recognized measure of world stock market performance. While we have outperformed our benchmark since inception, we are fully cognizant of the fact that our approach leads to different portfolio construction than would be expected if we were attempting only to correlate with the index.
Long-term philosophy
Our investment philosophy and trading approach are long term, as is consistent with Portfolio 21's focus on sustainability. As a result of this approach the fund expects low turnover, making it a potentially more attractive tax vehicle than funds with higher turnover.