Sustainable Investing-SRI/ESG

            “Sustainable investing integrates rigorous environmental, social and governance (ESG) analysis into security selection and portfolio construction.”

            We believe at Zenith that there is merit to this area of the investment world as more pools of investment capital are demanding accountability beyond share price appreciation. These activist investors are calling on corporations to examine their ethos and business practices and they are grading them. This is becoming a joint effort among the public and non-profit arenas.

            For instance, the Dow Jones Sustainability™ Indices are maintained collaboratively by S&P Dow Jones Indices and RobecoSAM. Following a best-in-class approach, the indices measure the performance of the world’s sustainability leaders. Companies are selected for the indices based on a comprehensive assessment of long-term economic, environmental and social criteria that account for general as well as industry-specific sustainability trends. Only firms that lead their industries based on this assessment are included in the indices.

            CDP is an international, not for profit organization providing the only global system for companies and cities  to measure, disclose, manage and share vital environmental information. CDP works with market forces, including 722 institutional investors with assets of US$87 trillion, to motivate companies to disclose their impacts on the environment and natural resources and take action to reduce them. CDP now holds the largest collection globally of primary climate change, water and forest risk, commodities information and puts these insights at the heart of strategic business, investment and policy decisions.

            These type of forces will continue to gain momentum in our estimation as the costs of not adhering to sustainable policies will appear to be too high and investors will demand a higher degree of corporate governance that balances profit and an eye to the future.

            We will keep you updated as we uncover managers that add value and that adhere to SRI/ESG principals.



Tom Koehler, CIO