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3D four star fund Triodos Sustainable Equity: the 3D Investing perspective

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During Good Money Week Blue & Green Tomorrow launched 3D Investing’s 5-Star rating system which allows advisers and investors to pick out the best of the best from the socially responsible investment universe. To find out more read the B&GT Guide to Sustainable Investment or visit 3Dinvesting.com. Today we take a look at the Triodos Sustainable Equity Fund.

Triodos is known as a real pioneer in sustainable investing, chiefly through its banking operations. The quality of the social research, transparency of communications and the ethos of the fund are second to none. Although the fund is a relatively recent launch in the UK, it has been available in the Netherlands since 2000. Since launch in the UK, the fund has marginally outperformed its benchmark.

Over the longer term, the original share class has also outperformed the world index. The social impact of the fund is relatively modest when compared with the Triodos Sustainable Pioneer Fund and the fund is exposed to companies which some investors may regard as controversial. Despite this, we have a very high level of confidence in Triodos’ ability to manage sustainability issues and most importantly, the fund provides exposure to a diverse range of larger global companies.

Investment Strategy & Fund Composition

Almost half of the fund is invested in North America with around 15% in the UK and the majority of the remainder in Europe. The style is very much one of investing in large global companies, with a focus on the consumer, healthcare, information technology and insurance and investment companies.

Ethical Approach & Suitability

Minimum ethical standards are applied to the fund, and in particular, coal, nuclear energy, unconventional gas and oil (5% threshold), and components of weapons are avoided. However, a few potentially controversial stocks are held including Diageo (alcohol), Starbucks (tax avoidance) and 3i (unscreened investment).

The reasons for holding these stocks are well made and sustainability analyses are also used to enter into a dialogue with companies. In order to stimulate companies to improve their sustainability performance, Triodos Sustainability Research uses this dialogue to raise awareness, convince others and to motivate change.

All companies have to meet one of two criteria:

1) Companies derive over 50% of their revenues from sustainable products or services that contribute to a clean earth, healthy living or climate protection themes.

2) Companies that do not provide typically sustainable products or services are analysed based on sustainability themes that cover environmental, social and corporate governance issues. The top 50% of the companies in a particular sector are eligible for investment.

SRI Capability & Management

Triodos is known for its ethical banking operations in Western Europe but it has been developing its investment management offering to include listed equity investments since the early 1990s. The fund is offered by Triodos Bank direct to its retail customers and is advised by Triodos Investment Management, a wholly owned subsidiary of the bank that is now responsible for €2.6 billion in assets under management.

It is one of the leading exponents of sustainable, thematic investing, with a wealth of expertise and resources at its command. Triodos constructs the investment universe from which its chosen fund manager selects stocks and is particularly rigorous in assessing companies and understanding the concerns of investors. The level of transparency is exceptionally high with all stocks being profiled, and not only those held, but also each potential investment in the investment universe. Furthermore, the engagement activity is fully documented by way of engagement and proxy voting reports and these are not just confined to corporate governance, but look at other wide ranging ethical issues.

Social Impact

The fund invests in companies that provide social and environmental solutions, but the overall flavour is that of a best of class approach, necessitated by the focus on large global companies. Despite this the fund does hold a significant proportion in solutions based companies, mainly healthcare, renewable energy and environmental services.

Risk Management

The fund is well diversified with more than 85 holdings. The average market capitalisation is more than £15 billion, which would generally indicate a lower level of risk than more thematic global funds, and this is borne out by a level of volatility that is lower than other global thematic funds. The underlying holdings are held in locval currencies and this risk is unhedged which introduces an extra level of risk reflected in our rating.

Transparency

Triodos is exemplary in the level of transparency and communication of its engagement and investment strategies. The reasoning for inclusion of each holding is made publicly available, as are the results of any sustainability analyses and dialogue with companies. Triodos actively seeks to improve the sustainability performance of its holdings through active dialogue and it benchmarks company performance on a range of sustainability issues to identify areas of strength and weakness. Triodos then aims to convince investee companies of the need for change and will work with them to achieve this.

Financial Performance & Management

The fund is managed by Delta Lloyd, a boutique fund manager in the Netherlands. Delta Lloyd adopts a distinctive style, generally investing in 25-35 companies in which it holds substantial positions and has a close relationship.

The objective is to invest in shares which the manager considers to be worth 30 – 50% more than the current market capitalisation, giving them a valuation safety margin.

In the case of the Triodos Fund, more stocks are held to reduce stock specific risk. The fund is measured against the MSCI World Index. The UK share class was only launched in 2013, since when the fund has outperformed the benchmark index. The original share class has fairly consistently beaten the benchmark since launch in December 2000.

In accordance with the Financial Services and Markets Act 2000, Blue and Green Communications Limited does not provide regulated investment services of any kind, and is not authorised to do so. Nothing in this magazine and all parts herein constitutes or should be deemed to constitute advice, recommendation, invitation or inducement to buy, sell, subscribe for or underwrite any investment of any kind. Any specific investment-related queries or concerns should be directed to a fully qualified financial adviser.

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Ways Green Preppers Are Trying to Protect their Privacy

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Environmental activists are not given the admiration that they deserve. A recent poll by Gallup found that a whopping 32% of Americans still doubt the existence of global warming. The government’s attitude is even worse.

Many global warming activists and green preppers have raised the alarm bell on climate change over the past few years. Government officials have taken notice and begun tracking their activity online. Even former National Guard officers have admitted that green preppers and climate activists are being targeted for terrorist watchlists.

Of course, the extent of their surveillance depends on the context of activism. People that make benign claims about climate change are unlikely to end up on a watchlist, although it is possible if they make allusions to their disdain of the government. However, even the most pacifistic and well intentioned environmental activists may unwittingly trigger some algorithm and be on the wrong side of a criminal investigation.

How could something like this happen? Here are some possibilities:

  • They could share a post on social media from a climate extremist group or another individual on the climate watchlist.
  • They could overly politicize their social media content, such as being highly critical of the president.
  • They could use figures of speech that may be misinterpreted as threats.
  • They might praise the goals of a climate change extremist organization that as previously resorted to violence, even if they don’t condone the actual means.

Preppers and environmental activists must do everything in their power to protect their privacy. Failing to do so could cost them their reputation, future career opportunities or even their freedom. Here are some ways that they are contacting themselves.

Living Off the Grid and Only Venturing to Civilization for Online Use

The more digital footprints you leave behind, the greater attention you draw. People that hold controversial views on environmentalism or doomsday prepping must minimize their digital paper trail.

Living off the grid is probably the best way to protect your privacy. You can make occasional trips to town to use the Wi-Fi and stock up on supplies.

Know the Surveillance Policies of Public Wi-Fi Providers

Using Wi-Fi away from your home can be a good way to protect your privacy.However, choosing the right public Wi-Fi providers is going to be very important.

Keep in mind that some corporate coffee shops such a Starbucks can store tapes for up to 60 days. Mom and pop businesses don’t have the technology nor the interest to store them that long. They generally store tips for only 24 hours and delete them afterwards. This gives you a good window of opportunity to post your thoughts on climate change without being detected.

Always use a VPN with a No Logging Policy

Using a VPN is one of the best ways to protect your online privacy. However, some of these providers do a much better job than others. What is a VPN and what should you look for when choosing one? Here are some things to look for when making a selection:

  • Make sure they are based in a country that has strict laws on protecting user privacy. VPNs that are based out of Switzerland, Panama for the British Virgin Islands are always good bets.
  • Look for VPN that has a strict no logging policy. Some VPNs will actually track the websites that you visit, which almost entirely defeats the purpose. Most obviously much better than this, but many also track Your connections and logging data. You want to use a VPN that doesn’t keep any logs at all.
  • Try to choose a VPN that has an Internet kill switch. This means that all content will stop serving if your VPN connection drops, which prevents your personal data from leaking out of the VPN tunnel.

You will be much safer if you use a high-quality VPN consistently, especially if you have controversial views on climate related issues or doomsday prepping.

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How Going Green Can Save Your Business Thousands

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Running a company isn’t easy. From reporting wages in an efficient way to meeting deadlines and targets, there’s always something to think about – with green business ideas giving entrepreneurs something extra to ponder. While environmental issues may not be at the forefront of your mind right now, it could save your business thousands, so let’s delve deeper into this issue.

Small waste adds up over time

A computer left on overnight might not seem like the end of the world, right? Sure, it’s a rather minor issue compared to losing a client or being refused a loan – but small waste adds up over time. Conserving energy is an effective money saver, so to hold onto that hard-earned cash, try to:

  • Turn all electrical gadgets off at the socket rather than leaving them on standby as the latter can crank up your energy bill without you even realizing.
  • Switch all lights off when you exit a room and try switching to halogen incandescent light bulbs, compact fluorescent lamps or light emitting diodes as these can use up to 80 per cent less energy than traditional incandescent and are therefore more efficient.
  • Replace outdated appliances with their greener counterparts. Energy Star appliances have labels which help you to understand their energy requirements over time.
  • Draught-proof your premises as sealing up leaks could slash your energy bills by 30 per cent.

Going electronic has significant benefits

If you don’t want to be buried under a mountain of paperwork, why not opt for digital documents instead of printing everything out? Not only will this save a lot of money on paper and ink but it will also conserve energy and help protect the planet. You may even be entitled to one of the many tax breaks and grants issued to organizations committed to achieving their environmental goals. This is particularly good news for start-ups with limited funds as the Environment Protection Agency (EPA) is keen to support companies opening up their company in a green manner.

Of course, if you’re used to handing out brochures and leaflets at every company meeting or printing out newsletters whenever you get the chance, going electronic may be a challenge – but here are some things you can try:

  • Using PowerPoint presentations not printouts
  • Communicating via instant messenger apps or email
  • Using financial software to manage your books
  • Downloading accounting software to keep track of figures
  • Arranging digital feedback and review forms
  • Making the most of Google Docs

Going green can help you to make money too

Going green and environmental stability is big news at the moment with many companies doing their bit for the environment. While implementing eco-friendly strategies will certainly save you money, reducing your carbon footprint could also make you a few bucks too. How? Well, consumers care about what brands are doing more than ever before, with many deliberately siding with those who are implementing green policies. Essentially, doing your bit for the environment is a PR dream as it allows you to talk about what everyone wants to hear.

Going green can certainly save your money but it should also improve your reputation too and give you a platform to promote your business.

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