This report shows public data only. Is this your organisation? If so, login here to view your full report.

Osmosis Investment Management

PRI reporting framework 2018

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

Resource Efficiency

 

The Osmosis Model of Resource Efficiency ("MoRE") systematically identifies relative resource efficiency amongst global large-cap companies. MoRE uses publicly available data on resource consumption and is updated on a monthly basis. We utilise MoRE to positively screen for those companies that are generating the most revenue relative to their resource input. We believe that by selecting these companies for investment that they will generate greater shareholder value over the longer term while simultaneously delivering significantly lower environmental footprints relative to the respective benchmarks

01.4. Describe your organisation’s investment principles and overall investment strategy, and how they consider ESG factors and real economy impact.

We live in a world of growing constraint, characterised by rising demand from population growth and rising living standards, converging with accelerating resource depletion. Companies that are measuring, managing and reducing their resource consumption while capitalising on this rising demand will deliver greater shareholder returns over the longer term.

Osmosis Investment approach objectively analyses corporate sustainability data which allows us to identify an uncorrelated source of alpha in publicly listed companies. This informational advantage when applied to a systematic quantitative approach creates investment portfolios that deliver superior risk-adjusted returns over the long-term while significantly reducing their draw on natural resources and so investor’s holdings have a much lower environmental footprint relevant to market benchmarks.

We are convinced that objectively identifying resource efficiency within global large cap companies allows us to target those who have addressed the issues of resource constraint and executed a sustainability program that has delivered to the bottom line. Our research allows us to identify companies whose sustainability programs have not only increased environmental performance but also delivered greater value to shareholders.

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

With world populations forecast to reach 7.8 billion by 2050 ( source UN ) and the global middle class expanding by approximately 150 million people  per year ( source Brookings Institute ) demands for goods, products and services will continue to grow.  All economies benefit from global GDP growth and we do not seek to penalise firms delivering sustainable growth. Such an insatiable demand must be met with the finite resources available.  Those companies able to deliver greater value from more efficient use of resource to service this demand will emerge as the most economically and environmentally sustainable.

Core to the Osmosis philosophy is to target investments across the breadth of the economy. Addressing supply is myopic and a fruitless endeavour unless demand is also equally addressed. Consumption is not confined to a single section of the economy.  The Model of Resource Efficiency portfolios address both the supply and demand side of the consumption equation as they target the most efficient corporates throughout each step of the value chain across the breadth of the economy. 

 

This philosophy is ultimately self-fulfilling.  When capital is allocated in significant scale through a process of natural divestment from the most inefficient to the most efficient companies, we believe that markets will force up the cost of capital for those inefficient companies.  This should ultimately pressure change from management to adapt their business models or they will risk being further downgraded by the market.  We aim to ultimately prove that the capital markets will play an important role in transitioning the world’s corporates to become more sustainable.

 

Critically, Osmosis identifies the results of management behaviour, using only objective data, rather than focusing on the bluster of management intent.  Identifying action over intent positions the Model of Resource Efficiency portfolios to those management teams who are successfully implementing a more sustainable approach.  The Osmosis data evidences that such behaviours are rewarded by the markets for their proven ability to aggregate greater value from their resources.


SG 02. Publicly available RI policy or guidance documents

New selection options have been added to this indicator. Please review your prefilled responses carefully.

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

URL/Attachment

URL/Attachment

02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

URL/Attachment

URL/Attachment

          Resource Efficiency

The Osmosis Model of Resource Efficiency (“MoRE”) systematically identifies relative resource efficiency amongst global large-cap companies.  MoRE uses publicly available data on resource consumption and is updated on a monthly basis.  We utilise MoRE to positively screen for those companies that are generating the most revenue relative to their resource input. We believe that by selecting these companies for investment that they will generate greater shareholder value over the longer term.
        

URL/Attachment

02.3. Indicate if your organisation’s investment principles, and overall investment strategy is publicly available

02.4. Additional information [Optional].


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

Osmosis is majority owned by its directors and employees with a small number of external investors (who have no access to the investment decisions of Osmosis or its clients). Osmosis does not hold capital for proprietary investment and undertakes no dealing activities on its own account. Osmosis has a stringent personal dealing policy which requires prior approval of any dealing activities that might give rise to a conflict and such approval is unlikely to be granted even if there is only a perceived or potential conflict. This policy is applied to all members of staff who are required to make an annual statement including disclosure of all brokerage accounts (and private equity holdings). Those employees who undertake personal dealing activities are required to provide contract notes (typically direct from a broker) and quarterly brokerage statements. This robust approach is designed to avoid any conflicts arsing in the dealing activities of Osmosis and its staff.

03.3. Additional information. [Optional]


SG 04. Identifying incidents occurring within portfolios (Private)


Top