THIS is What "Serious About Sustainability" Looks Like

If you are a company who wants to do business with the big guys, you often to have do it their way. Today, that can mean doing business sustainably.  Large companies are held accountable for the impact of their suppliers.  So, those suppliers must play by the new rules of the game. 

In other words, it just got serious.

As a sustainable investor, you may feel good knowing that your portfolio companies are moving the needle on environmental issues.  But have you considered the risk that your small cap investments may become increasingly uncompetitive if they can't meet these increasingly higher standards? 

There is a real risk that the measurement and documentation of these issues may render some firms "out of the loop" when it comes to earning the business of a Procter and Gamble or a Microsoft.

Water Stress: A World Wide Problem

Sustainable investors should be particularly concerned about how their portfolio holdings are addressing one of the most critical issues of our time:  Water.
 

Unsustainable water use is threatening agriculture, other business and populations in China, India and the US, according to a study by risk analysis company Maplecroft.  Companies who fail to manage this issue stand to lose sales, and even the right to operate in certain countries.

Boardwalk Portfolios: Top Rankings for Ethics and Climate

Last month, global watchdog Ethisphere released its World's Most Ethical Companies list.  This month, research firm Maplecroft disclosed its Climate Innovation Index.  In both cases, Boardwalk's model portfolio holdings were well represented.

Among those considered most ethical, General Electric and Starbucks have made the grade for all six years of the study's existence. 

UPS, Cisco, Intel, Alcoa, and Pepsico were also among the domestic honorees in our models, while Accenture (Ireland), National Grid (UK) and Westpac Banking (Australia) were among the foreign holdings recognized.

The Carbon Innovation Index recognizes companies who "successfully innovate and manage climate-related opportunities and risks and are better equipped to operate in this future growth environment." Many of the same "ethical" companies are also making a serious effort to prepare for climate change.  Boardwalk holdings GE, Alcoa, Intel, Hess, Praxair and Ford are among the top ten ranked firms.

For more on the Boardwalk model portfolios click Global ESG Titans or ESG 50 USA.

Mounting Challenges for the World's Food Supply

With an expanding and increasingly urban, meat consuming world population, how will farming co-exist with climate change and water/energy/land scarcity?

Agriculture already consumes 70% of the world's water supply.  And by 2030, farmers will need 45% more water to feed the almost 9 billion people on the planet by then.  Where will it come from? 

Meanwhile, food production, and getting food to the consumer, both use vast amounts of energy.  And traditional energy sources aren't getting cheaper.  These inputs, and more volatile weather, are resulting in large fluctuations in food prices.  And as the author points out, this has often been associated with social unrest.

As a society, how will we deal with this issue?

There is much food for thought in the attached article from Environmental Leader.  Well worth a read.

My Sustainability Talk with Corporate America

Earlier this month, I had the pleasure of addressing the Atlanta chapter of the National Investor Relations Institute (NIRI) on the subject of sustainability. Investor relations reps are a company's connection to its shareholders -- answering investor questions, providing information, etc. It is hardly glamorous work, but requires a great deal of effort, and knowledge, to do it well.

Increasingly, questions come to them from investors like Boardwalk, asking about emissions, water usage, diversity, etc.  And many IR representatives are doing a yeoman's job of trying to meet the disparate needs of the investor community. At the end of the day, however, if your company is doing little to address the core issues that bother your shareholders, there ain't much that a pretty face or articulate voice are going to do to fix that.

The good news is that many companies are doing much more, and are using "sustainability" to improve nearly every aspect of their business.

Impact Investing: The Trillion Dollar Investment Opportunity

If you are familiar with Boardwalk Capital, then you know that our firm provides a different type of investment management. We focus on sustainable investing --building investment strategies from what may be called "exemplary corporate citizens". 

We think this is pretty important stuff, but to be honest, it's usually just part of the story. To create a full sustainable portfolio, however, one must bring in other asset types such as bonds, commodities, and an array of "specialty" investments -- all with an overarching theme of responsible and profitable investing.

Within the catch-all "specialty" category listed above, one finds what are now called Impact Investments. These are often truly unique enterprises -- companies organized to meet a societal need -- and turn a profit while doing so.

This new and remarkable business model was described by JPMorgan as the next big asset class.  They called it A One Trillion Dollar Investment Opportunity.

Why the World's Largest Investors are Embracing Sustainable and Responsible Investing

Pension plans, college endowments and charitable organizations are some of the largest and most astute investors in the world. As individuals, should we take lessons from their actions?

In recent years, institutions who manage trillions of dollars have begun to take a new approach to investing. They have determined that resource scarcity, climate change, activist consumers and even the speed of social media have changed the investment landscape.

Company reputations are damaged in an instant, and billions of dollars can be wiped away by reckless actions. These institutional investors are increasingly employing a "Sustainable and Responsible Investment" model to help them manage this array of new risks, while positioning themselves to pursue additional opportunities...

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