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3D five star fund WHEB Sustainability Fund: 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 WHEB Group’s Sustainability Fund.

WHEB is a specialist asset manager wholly focussed on sustainable investing, including environmental infrastructure and private equity as well as their listed equity fund. The Sustainability Fund invests in high quality established businesses capitalised at $1 billion or more and which fall into one of four general themes – resource scarcity, an ageing population, urbanisation and globalisation.

The fund provides good global exposure with less volatility than other thematic funds.  The fund management was much strengthened in 2012 when the former Henderson team was recruited and since then performance has been broadly in line with the global index. The level of transparency, communication and understanding of sustainability is exceptional and the fund is therefore one of only a few funds to be awarded a 3D five star ranking.

Investment Strategy & Fund Composition

The Sustainability Fund invests in high quality established businesses, 90% of which are capitalised at $1 billion or more.  Investments address one of four general challenges – resource scarcity, an ageing population, urbanisation and globalisation – and follow a number of social and environmental themes as shown below:

The investment approach is mid-cap, unconstrained and can best be summarised as ‘growth at the right price’.  There is a preference for high quality established businesses with strong growth, driven by the fund’s themes. Valuation is an integral part of stock selection. WHEB integrates environmental, social and governance analysis within traditional financial analysis. The managers believe that this creates a better basis on which to value investment opportunities.  It also enables them to get a better view on the quality of management, and the resilience and risk associated with the outlook for companies.

Ethical Approach & Suitability

The focus is wholly on investing in solutions to environmental and social challenges. Although no formal ethical exclusions are applied, the focus on environmental solutions means that there is far less ethical compromise than many ethical funds. That having been said, stock holdings include China Longyuan (18% coal), Suez Environment (water privatisation) and medical equipment manufacturers (animal testing). All of these are included on the basis of their positive environmental or social attributes.  In addition, sustainability analysis is conducted on all investments under consideration.

Suitable for most investors, but note comments above.

Social Impact

The fund is wholly focussed on solutions to social and environmental challenges, that fall in to one of the funds four core themes.

SRI Capability & Management

WHEB has one of the most capable and well resourced SRI teams and is backed by a company that is wholly devoted to sustainable investing, with a background in sustainable infrastructure. The team seek to promote best practice in the companies in which investments are made. An independent Investment Advisory Committee provides a layer of independent oversight of the Fund. The Committee challenges the managers on their adherence to the fund’s mandate, process and investment philosophy. This committee comprises a diverse and experienced body of independent sustainable investment professionals.

Risk Management

The fund does not have the smaller company bias of many thematic funds and is therefore likely to be less volatile. Despite being a thematic fund, the themes are quite broad and a disciplined approach to fund management means that risks are well managed. Being a global fund, there are currency risks and these are not hedged.

Transparency

The level of transparency is exceptionally high. Not only are details of all holdings, engagement and voting records made public, but the investment advisory committee minutes are also published, something that is unique in the industry. The fund is also a signatory to the Eurosif Transparency Code.

Financial Performance & Management

Tim Dieppe and Ted Franks are co-managers of the fund. Tim Dieppe was formerly in charge of the ‘Industries of The Future’ funds at Henderson Global Investors where he established a solid track record managing funds with a similar mandate to that of the WHEB Sustainability Fund. Sustainability funds under his charge have outperformed the benchmark index by a considerable margin since January 2006 when he first managed the Henderson Industries of The Future fund.

The WHEB Fund had a bad start under the previous manager but has recovered under the more disciplined approach of the current team. Since the change of management the fund has slightly underperformed the benchmark index, but is also slightly ahead of the average fund in its sector and the performance largely mirrors that of the MSCI World index. The fund is managed on a long-term basis with a relatively long average holding period.

The managers co-invest in the fund and are part owners of WHEB Asset Management.

The average holding period is five years, which allows management to extract full value from fundamental research, and is in stark contrast to short-termism that pervades the investment management industry.

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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Green Weddings Trend: Why 70% of Newlyweds Are Going Green

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A couple of months ago, my best friend got married to her new husband. They are both very eco-conscious people, so they decided to have a unique twist on their wedding. They asked for the following:

  • They arranged a carpool with their friends.
  • They didn’t have any balloons. Instead they used umbrellas.
  • They used plant materials instead of plastic confetti.
  • My friend insisted her husband not purchase a diamond. In addition to being ecologically conscious, she didn’t like the idea of having a stone that was used in conflict zones.

My friends aren’t the only ones making these changes. In fact, nearly a quarter of all newlyweds are organizing green weddings.

Green Weddings Are Becoming the Norm

People are more concerned about green living than ever before. They are trying to incorporate environmental protectionist ideas into every facet of their lives, even the most intimate, such as marriage. A growing number of people are trying to have green weddings, which can make a big difference in reducing their carbon footprint.

How much of a difference can this make? Here are some statistics to bear in mind:

There are a number ofreasons that green weddings are becoming more important. Here are a few.

People Are More Worried About Environmental Preservation than Ever Before

Green living in general is becoming a greater concern for most people. Even younger conservatives are breaking from their older counterparts by insisting on fighting climate change. According to a poll from Pew Research earlier this year, 75% of Americans say that they are very concerned about protecting the environment. Having green weddings is a good way to act on this concern.

One of the biggest changes people are making is using recycled products for their green weddings. This is explained by the research from Pew:

“Overall, 32% of U.S. adults say they are bothered a lot by people throwing away things that could be recycled. Roughly six-in-ten Americans (61%) who say they always try to live in ways that protect the environment say it bothers them “a lot” when others throw away things that could be recycled. Among those who are less focused on environmental protection, only a quarter say it bothers them a lot when others don’t recycle. People who are environmentally conscious are also twice as likely as others to say that seeing someone incorrectly putting trash in recycling bins bothers them a lot (42% vs. 21%).”

Indifferent Politicians Are Driving them to Take More Initiative

Many politicians in power have been very hesitant to take action on climate change. Many of them have openly stated that it is a hoax. These politicians are forcing people to do what they can in their own lives to make a difference. Making small changes, such as hosting green weddings, is a great way to improve the environment without waiting for political momentum.

Cost and Simplicity

A couple of the biggest reasons that people want to host green weddings have nothing to do with their concern for the environment. Running green weddings is simply cheaper and simpler than having a massive, traditional one. One of the biggest changes is that they are buying green engagement rings from the best brands.

Green Weddings Are the Future

Green weddings have become very popular over the past few years. They will probably account for close to 90% of all marriages by 2025. People that are planning to get married should look into the benefits and plan accordingly.

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Green Tech Start-Ups: Are they the Future?

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Endless innovations are occurring in green companies, reinventing the industries they belong to. Gradually, they are beginning to amass more success and popularity. Consequently, these factors serve as a good indicator for green technology businesses, and their development must begin somewhere.

Green tech start-ups boast a wide array of opportunities for the economy and environment, while boosting recruitment openings with valuable services. While the technology industry is littered with high revenues and competition, the green tech start-ups are the clear sign of a cleaner future.

Fulfilling a Genuine Need

Many tech companies will market themselves as the ultimate tech giants to shift stock and make profit. As they all vie for attention through warped corporate rhetoric, there is only one ethical winner; the start-up green tech company.

Some argue that mainstream tech businesses have grown far too big, branching out into other industries and standing between the consumer and practically everything they do. However, green tech start-ups go beyond the shallow ambitions of a company, answering a call to sincerely help the customer and climate in any way they can. Of course, this is an attractive business model, putting customers at ease as they contribute to a humanitarian cause that is genuine through and through.

After all, empathy is a striking trait to have in business, and green tech start-ups maintain this composure by their very nature and purpose.

Creating Opportunities

Despite the pursuits for clean energy still needing more awareness, green tech is an area that is ripe for contribution and expansion. There’s no need to copy another company or be a business of cheap knockoffs; green tech start-ups can add a new voice to the economy by being fresh, fearless and entrepreneurial.

Technology is at its most useful when it breaks new ground, an awe that eco-friendly innovations have by default in their operations. Of course, green tech start-ups have the chance to build on this foundation and create harmony instead of climate crisis. Ultimately, the tech advancements are what revolutionise clean energy as more than an activist niche, putting theory into practice.

Despite the US gradually becoming more disengaged with green technology, others such as China and Canada recognise the potential in green technology for creating jobs and growth in their respective economies. The slack of others spurs them on, which creates a constant influx of prospects for the green tech sector. Put simply, their services are always required, able to thrive from country to country.

A Fundamental Foresight

Mainstream technology can seem repetitive and dull, tinkering with what has come before rather than turning tech on its head. Since 2011, technology has been accused of stagnation, something which the internet and petty app services seem to disguise in short reaching ideas of creativity.

However, green tech start-ups aren’t just winging it, and operate with a roadmap of climate change in the years ahead to strategize accordingly. In other words, they aren’t simply looking to make a quick profit by sticking to a trend, but have the long-term future in mind. Consequently, the green tech start-up will be there from the very start, building up from the foundational level to only grow as more and more people inevitably go green.

They can additionally forecast their finances too, with the ability to access online platforms despite the differing levels of experience, keeping them in the loop. Consequently, with an eye for the future, green tech startups are the ones who will eventually usher in the new era.

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