13 October 2020

Insights

Sustainable Investments Iko Iko Ane

“Sustainable return on investment is a methodology for identifying and quantifying environmental, societal, and economic impacts of investment in projects and initiatives The goal is to make risk-opportunity assessments more robust by providing new visibility into intangible internal costs and benefits, and externalities- social, economic, and environmental effects that are typically not considered in traditional cash-oriented project planning.”

That is one definition but covers the basics, as data has become more available impact is more readily measurable making a company more transparently investible.

The WSJ lists the 100 most sustainably managed companies in the world.

The Wall Street Journal’s list takes a broad view of sustainability, assessing a company’s leadership and governance practices for their ability to create value for shareholders over the long term.

How you define sustainable matters at the margin but the list is still worth viewing , Sony ranked the highest followed by Phillips and Cisco. “Hardware makers were the most common type of businesses found in the WSJ sustainability ranking, claiming 18 positions in the top 100 list. Hardware companies tend to focus on business areas that our sustainability-management measures weigh heavily, such as supply chain, materials sourcing and efficiency, and product design and life cycle. The next most heavily represented group, chemical makers, with 10 spots...”

“By country, U.S. companies took 23% of the slots, followed by Japan at 16% and France at 9%. By region, Asian and European companies each garnered 36%, North American 26% and African 2%.”

China had no companies on the list although HK had 2, Australia and NZ had NONE.

Apple and Facebook were on the list and have once again driven US equities prices higher with Apple shares up 6%... just because.

Do you focus on sustainable investments? A survey released last year by Schroders found that 61% of U.S. investors said they would be encouraged to make sustainable investments if their adviser gave them more information. This is where Nexus is looking to make a difference, albeit in non-listed investments, we can help.

Institutional investors believe, U.S. assets under management using sustainable strategies reached $12 trillion at the start of 2018, roughly a quarter of all professionally managed assets in the country, according to US SIF: the Forum for Sustainable and Responsible Investment.

The US SIF Foundation is currently researching the 2020 Report on US Sustainable and Impact Investing Trends, which will be released on November 16. I’ll be marking the date.

Among mutual funds and ETFs, where individual investors put much of their money, sustainable funds held $137.3 billion in the U.S. at the end of last year—less than 1% of the country’s total $20.7 trillion of fund assets, according to research firm Morningstar, even though inflows more than tripled last year from 2018.

Sustainable investments returns matter, focus on the sustainable characteristics but know that slight definition differences do not change the theme. Just as a slight change of lyrics doesn’t always change a song.

Iko IKo a song about New Orleans Mardi Gras was made famous by the Dixie Cups in the 1960s and has been rerecorded ever since,

The most recent edition includes

“My bestie and your bestie Sit down by the fire”

"Iko Iko ane Chukin morphina anane Chukin morphina ne"

Everyone has recorded it a little differently, but no one who recorded it knows what these lyrics actually mean but they sound good.

Iko Iko by Dixie Cups

David “Bushy” Nolan