Articles and client letters from the Sustainable Funds Group.
These articles are provided for information only and do not constitute and should not be construed as, investment advice or a recommendation to transact in any company, stock or sector mentioned.
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We have often been asked how we narrow down a universe of 15,000 Asian and Emerging Markets companies to a portfolio of approximately 50. It’s a good question, particularly as now that we invest globally, giving us an investible universe of 65,000 companies, the challenge has become even starker.
Fifteen years ago we used to send letters to companies and stock exchanges extolling the virtues of single share classes, tag along-rights and ‘one share, one vote’. Today, we actively seek out companies with dual share classes. What has changed?
Pakistan became a sovereign nation the day before India, Sri Lanka followed shortly and Bangladesh a couple of decades later. While the subcontinent has a rich history, its political systems are still evolving.
Sustainability issues – climate change, global food shortages, water shortages, and poverty, as well as safety, management and governance scandals – are now daily news headlines. Sustainability is relevant to making any allocation of capital. It is not intangible; it can be assessed at all levels of an investment process to allow for identification of elements of quality as well as less obvious risk.
Why is Asia still regarded as a separate asset class by investors? At first glance, it looks like an artificial construct, made up of 15 countries with very little in common, other than crude proximity on a global map. There is not even a daily flight between Beijing and Delhi.
Sharing resources has gone on for as long as humans have been living in tribes. But without the enabling role of the internet or mobile devices it is hard work in a large complex society with a myriad of goods and services. The internet is now helping to solve this problem.
In 2010, Puma pioneered a new form of corporate reporting. The German sportswear company produced an environmental profit and loss account, which estimated the company and its supply chain to have caused €145m of environmental damage that year, relative to €202m of net profit.