ESG

“The portfolio does look different to mainstream,” says Australian Ethical portfolio manager and equity analyst Deana Mitchell, before explaining how the fund manager tilts up and down to meet its ethical charter.

Sam Elsom, Mr Seaweed and the rest of the Sea Forest team are unlocking the power of asparagopsis to reduce methane emissions in a spectacular way. The plan has caught the attention of Prince William and Caroline Kennedy, but remains bogged down by governmental process.

“Rational, economic arguments” are required to support a reduction of the costs of global warming on the planet and the economy, says Australian Ethical.

Despite being buffeted by some serious headwinds, the sustainable investment movement shows no sign of slowing down in Australia.

Meeting the Paris-aligned guidelines can be problematic for Australia’s big investors, but it’s possible to deliver compliant investment strategies with modest tracking error budgets using a layered approach according to one investment group.

Marketing ESG credentials could be greenwashing even if correctly disclosed, according to Zenith, but going “dark” on disclosure isn’t an option either.

Investing in quality takes patience, as does investing sustainably. The convergence plays well for those looking to build a portfolio with ESG parameters, something Australian Ethical believes will benefit from net-zero tailwinds in the future.

Eighteen months ago, the fund started by former US banker David Di Pilla announced its target to achieve net-zero for scope 1 and scope 2 emissions by FY28. Alongside this came an energy road map and the first phase of its ‘Energy Management System’, which was subsequently rolled out across 18 sites.

ESG is the “emptiest” idea, according to Aswath Damodaran, while AI will morph into higher costs for companies overall with no competitive advantage in a world where the technology is ubiquitous.

As Australia’s energy transition ramps up, spurred by a greater government commitment, the ethical investment manager says investors risk getting saddled with “stranded assets” if they don’t limit their exposure to fossil fuels.

Using Coles as a case study, Australian Ethical demonstrates how sustainability-minded money managers are dealing with the nuanced issues involved in appraising the activities of big companies.

The ethical money manager says Lendlease failed to provide information required to independently assess the impact of its planned development in Mt Gilead, an area deemed critical to the survival of a resident koala colony.