RATHBONE GREENBANK GLOBAL SUSTAINABILITY FUND: Green fund is a sustainable investment
It is just three years since fund manager David Harrison launched Rathbone Greenbank Global Sustainability and yet attitudes to sustainable investing have transformed in that short time.
The fund was created to find good-value companies that operate sustainably and have strong environmental, social and governance policies.
‘At the beginning, we had meetings with company chief executives who looked at us blankly when we asked about sustainability,’ says Harrison. ‘Today, most firms are speaking about it. It’s an incredible transformation.’
Harrison and his team have a global mandate, which means they can seek out the best sustainably focused companies from around the world. They concentrate on sustainability not only to help shape a positive future for the planet and society, but also because they believe companies that prioritise these values are well placed to deliver long-term returns for investors.
The result is a portfolio of 44 companies, in sectors from construction to healthcare. More than half are US firms, with the rest split between Europe, the UK and Asia Pacific. Since its launch, the fund has turned a £1,000 investment into £1,633. Global funds have returned £1,405 over that time on average.
While all companies are talking the talk on sustainability, not all are genuine, says Harrison. ‘I can get a sense within the first minute of a meeting with a chief executive whether they are taking sustainability seriously or are greenwashing,’ he says.
An increasingly popular way that companies demonstrate their sustainability is by relating their activities to the United Nations Sustainable Development Goals.
These are 17 targets, such as zero hunger and clean water and sanitation, which together could help to end poverty, protect the planet and improve the lives of everyone, everywhere. Harrison believes the best sustainable companies are often those focusing on one or two goals central to their core operations, rather than those that claim to support several goals halfheartedly.
‘One company we like is Chr. Hansen, a Danish firm that works in sustainable agriculture,’ says Harrison. ‘It targets three of the goals and links them to its plans to be profitable.’
Another favourite is Assa Abloy, a Swedish company that specialises in digital locks. ‘We believe that hotels of the future will not need any staff to check guests in,’ says Harrison. ‘Instead, they will be able to use a smartphone to check in and to open their hotel room door.’
This technology, pioneered by Assa Abloy, will also allow doors to be opened in other settings if someone isn’t present to let another person in, and it means there is no need to work out how to get the keys to them.
Harrison believes this concept has huge potential and is more sustainable than traditional entry systems. It is popular in South Korea, where 70 per cent of locks are digital, compared with just three per cent of locks in the US.
Although the fund has already profited considerably from investing in sustainable companies, Harrison believes it is only the beginning.
‘Governments are focusing on green infrastructure, which creates enormous investment opportunities,’ he says. ‘Electrification is also a really powerful investing theme.’
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