The investments we use in client portfolios follow the principle of the Triple Bottom Line – People, Planet & Profit. Some of the focal points are listed below.
People: Pay fair wages, provide safe working conditions, support the local community.
Planet: Reduce ecological footprint, increase renewable energy, reduce waste production.
Profit: Make money by supplying a product that people want, at a price they are willing to pay.
The idea behind the Triple Bottom Line is based around the inter-dependence and well-being of both corporate, labor and other stakeholders. It takes the indirect and non-financial impacts into consideration as part of running the company, in addition to the usual direct costs only.
Often, there is a positive financial result from improved practices, e.g. through lower labor turn-over and more efficient use of resources (incl. less waste production). The companies that excel within this framework are often more agile and can react faster to changes in consumer tastes, as well as act more nimbly in the ever-evolving political environment. This can give them a competitive advantage and a better long-term value proposition from an investment point of view.
Sustainable Development Goals
We use the 17 Sustainable Development Goals as a framework for evaluating our investment lineup (SustainableDevelopment.un.org). We evaluate each investment based on the general contribution towards the triple bottom line, instead of a focus on a select few of the categories.
Philosophy
In our opinion, we do not believe the markets fairly value the growth opportunities supported by the long-term trends shaping our economy, or the risks associated with poor environmental, social or governance practices.
By applying the Triple Bottom Line screen to our investments, we try to unlock long-term competitive advantages and potential financial outperformance.
Process
Our investment process follows the principles of Modern Portfolio Theory, where a well diversified portfolio is established with a keen eye on the expenses in the underlying investments. We utilize a variety of mutual funds, ETFs and individual securities to help strike the right balance in the asset allocation.
For each client, their portfolio is aligned to match the risk profile, based on their specific circumstances.
The portfolios are in general managed on a household basis, which allows us to take advantage of the different tax treatments of various account types –or asset location – to keep more of the return after taxes.
We aim to keep trading activity low, so that unnecessary capital gains aren’t triggered. However, we try to take advantage of what we consider to be opportunities for tactical adjustments to the long-term strategic allocations.