As a responsible Investor, NewAlpha strongly believes in the inevitable convergence between Investment and Responsible Investment.
On the foreseeable future, any investment will be analysed according to financial criteria as well as ESG ones. Apart from obvious cases, such as coal fired power plant companies, where asset value has already started to halve (stranded assets), it is still difficult today to quantify precisely:
- the negative impact of not taking ESG issues into account
- the positive impact on investment appreciation of such criteria
However, we are convinced that financial performance will be strongly correlated to business ethics and that ESG criteria will be critical to manage any business.
As an example, diversity and inclusion, leading to broader point of views when dealing with investment analysis, have demonstrated to be efficient. On another hand, as talented people tend to request sustainability as a prerequisite to join corporations, high performing companies will be sustainable ones.
Practically, in the fund of fund or investment advisory business, we select asset managers and invest in management teams. Therefore, extended due diligence on people, mindset, corporate and business values (such as how they conduct their own business) are critical to us.
We certainly request some exclusions, progression towards parity, among other topics, but the best way to ensure we deal with responsible managers is to research the ones with value alignment, or willingness to move towards sustainable investment as an intimate conviction.
Finally, building trust and transparency with our managers will benefit to long term partnership and financial performance.