WHEB Asset Management has come on leaps and bounds since bringing in the Henderson team in May 2012. A year on, Alex Blackburne sat down with managing partner George Latham and founding partner Clare Brook to speak about its success.
This article originally appeared in The Guide to Sustainable Investment 2013.
WHEB Asset Management has come a long way in a relatively short space of time. Launched in 2009, its flagship Sustainability Fund has gone from strength to strength, and is now considered one of the most attractive options in an increasingly attractive positive investment market.
For the first three years of the fund’s existence, it grew steadily. Its philosophy of only investing in companies that provide solutions to some of the most urgent sustainability challenges had allowed it to grow to £29m in size by the end of 2011.
By this point, WHEB was ready to expand. It began looking for a new recruit – a fund manager who could aid this expansion, and who could eventually take over the running of the business. It was around this time that Henderson Global Investors had decided to close its sustainable and responsible investment (SRI) arm – a move that some said marked a “backward step” for the sector – leaving its SRI team unemployed and looking for work.
You can probably guess what happened next.
There are instances in life where one has to sit back and marvel at the way the universe seems to connect everything in one big, intergalactic jigsaw. Had one of these two occurrences been just a few months earlier or later, it’s unlikely that a partnership between WHEB and the former Henderson team would have come about.
As it is, the two combined officially in May 2012, and have not looked back.
“We’ve recruited the best team in the sector”, says founding partner Clare Brook, speaking at the firm’s office near Manchester Square in London.
“We’ve put together a super team. As any follower of Premier League football knows, if you invest in the best players, you’re going to start getting really good results. So our performance has really started to take off. We’re outperforming our one-, three- and six-month benchmarks and a lot of people have started to notice how performance has started to improve since we put the new team in place.”
People want to invest in global sustainability strategies covering both social and environmental themes that take a long-term approach to creating value
And notice they have. Blue & Green Tomorrow conducted a survey at the back end of 2012 among financial advisers that are members of the Ethical Investment Association, asking them which asset managers they use most often.
WHEB’s popularity increase was second only to Royal London – rising from joint 26th place in 2010 with 3% of advisers using it, to joint 12th last year with a third of EIA members now saying they invest some of their clients’ money into its Sustainability Fund.
“We’re starting to get some mainstream ratings agencies grading us very highly, and we think what they’re picking up on is a) the heritage and experience of the team, and b) the robustness of the investment process”, adds Brook.
“Success breeds success. People have started to see we’re getting the assets in and that we are living up to the hype that they had hoped of us when the new team joined.
“We think that this fund is the answer to what people have been looking for. It’s performing well and it’s actually investing in the sort of companies that people interested in sustainability want to see in their fund.”
But it’s not only the arrival of the Henderson team that has kicked WHEB’s progress on. Its fund’s positive focus on nine key sustainability themes – resource efficiency, water management, cleaner energy, environmental services, sustainable transport, safety, wellbeing, education and health – has allowed it to surge ahead of many competitors in the ethical fund market that perhaps rely too much on excluding harmful and destructive industries, rather than focusing on investing in innovative, clean technologies, for example.
Any company WHEB invests in has to have at least a third of its revenue or profits coming from one or more of the nine themes (the average for the fund as a whole is over 80% coming from the themes), and the fund managers have to be comfortable that the rest of the business is not pulling in the opposite direction.
And it’s the focus on companies providing solutions that has driven WHEB’s popularity in the past year.
Managing partner George Latham, ex-Henderson, says, “People want to invest in global sustainability strategies covering both social and environmental themes that take a long-term approach to creating value.
“People are interested in looking for logical reasons why a strategy can and should outperform over a longer period of time that goes beyond the idea that somebody’s going to get up and sprinkle some magic dust over the portfolio. So many investment funds are sold on the basis of some single person’s charisma and most recent track record, which I think is wrong.
“Traditionally, most evidence shows that very few people are able to continue with the magic dust approach for a long period of time.”
At a time when transparency in the ethical investment market is perhaps lacking, WHEB’s decision to publish every single one of its fund’s holdings on its website, along with a five-line rationale as to why each fits in with its themes, also sets it apart from many of its competitors. All funds – ethical or otherwise – have this kind of information readily available. For the vast majority, it’s not a question of how easy it is to publish it; it’s a conscious decision not to.
A report by responsible investment campaigners ShareAction (then called FairPensions) from December ranked 20 of the largest ethical investment houses on their responsibility, transparency, accountability and stewardship. WHEB came joint second, alongside Standard Life and behind F&C Investments. Only nine of the 20 published a full list of their holdings.
But WHEB’s transparency doesn’t stop there.
Latham adds, “Another thing we do, which I think is very unusual, is we have a level of external governance looking at our fund – that’s the eyes and ears of the customer in a way.
“That investment advisory committee sits down with us, and challenges us on whether our stock selection actually fits into one of our themes. In an extreme situation, they can say they don’t agree.
“But what would happen if we then said we don’t care? What we do, which is new to us and fairly unique, is publish the minutes of each meeting. So if we were to have that situation, then that would be very public.”
Brook says that before Latham and the Henderson team joined WHEB, the Sustainability Fund did actually have a holding that was contested by the advisory committee. It was swiftly sold.
WHEB’s combining of finance and sustainability has led to a prosperous past few months. What’s clear is that its management team is 100% behind its strategy (each of its partners have put more than half their own personal wealth into the fund alongside its clients) – something that perhaps wouldn’t be the case at larger investment houses, and something that has unquestionably benefitted both the performance of the fund, and its attractiveness to investors.
For now, its Sustainability Fund – now around £48m in size – will remain its one and only investment vehicle. But neither Brook nor Latham rule out expansion in the future. The pair are ambitious with their future growth plans, but who can blame them?
After the whirlwind 12 months enjoyed by everyone at WHEB, the only way – surely – is up.
How Going Green Can Save A Company Money
What is going green?
Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.
The first step in going green
There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.
Making needed changes within the company
After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.
Reducing the common paper waste
Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.
Make money by spreading the word
Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.
5 Easy Things You Can Do to Make Your Home More Sustainable
Increasing your home’s energy efficiency is one of the smartest moves you can make as a homeowner. It will lower your bills, increase the resale value of your property, and help minimize our planet’s fast-approaching climate crisis. While major home retrofits can seem daunting, there are plenty of quick and cost-effective ways to start reducing your carbon footprint today. Here are five easy projects to make your home more sustainable.
1. Weather stripping
If you’re looking to make your home more energy efficient, an energy audit is a highly recommended first step. This will reveal where your home is lacking in regards to sustainability suggests the best plan of attack.
Some form of weather stripping is nearly always advised because it is so easy and inexpensive yet can yield such transformative results. The audit will provide information about air leaks which you can couple with your own knowledge of your home’s ventilation needs to develop a strategic plan.
Make sure you choose the appropriate type of weather stripping for each location in your home. Areas that receive a lot of wear and tear, like popular doorways, are best served by slightly more expensive vinyl or metal options. Immobile cracks or infrequently opened windows can be treated with inexpensive foams or caulking. Depending on the age and quality of your home, the resulting energy savings can be as much as 20 percent.
2. Programmable thermostats
Programmable thermostats have tremendous potential to save money and minimize unnecessary energy usage. About 45 percent of a home’s energy is earmarked for heating and cooling needs with a large fraction of that wasted on unoccupied spaces. Programmable thermostats can automatically lower the heat overnight or shut off the air conditioning when you go to work.
Every degree Fahrenheit you lower the thermostat equates to 1 percent less energy use, which amounts to considerable savings over the course of a year. When used correctly, programmable thermostats reduce heating and cooling bills by 10 to 30 percent. Of course, the same result can be achieved by manually adjusting your thermostats to coincide with your activities, just make sure you remember to do it!
3. Low-flow water hardware
With the current focus on carbon emissions and climate change, we typically equate environmental stability to lower energy use, but fresh water shortage is an equal threat. Installing low-flow hardware for toilets and showers, particularly in drought prone areas, is an inexpensive and easy way to cut water consumption by 50 percent and save as much as $145 per year.
Older toilets use up to 6 gallons of water per flush, the equivalent of an astounding 20.1 gallons per person each day. This makes them the biggest consumer of indoor water. New low-flow toilets are standardized at 1.6 gallons per flush and can save more than 20,000 gallons a year in a 4-member household.
Similarly, low-flow shower heads can decrease water consumption by 40 percent or more while also lowering water heating bills and reducing CO2 emissions. Unlike early versions, new low-flow models are equipped with excellent pressure technology so your shower will be no less satisfying.
4. Energy efficient light bulbs
An average household dedicates about 5 percent of its energy use to lighting, but this value is dropping thanks to new lighting technology. Incandescent bulbs are quickly becoming a thing of the past. These inefficient light sources give off 90 percent of their energy as heat which is not only impractical from a lighting standpoint, but also raises energy bills even further during hot weather.
New LED and compact fluorescent options are far more efficient and longer lasting. Though the upfront costs are higher, the long term environmental and financial benefits are well worth it. Energy efficient light bulbs use as much as 80 percent less energy than traditional incandescent and last 3 to 25 times longer producing savings of about $6 per year per bulb.
5. Installing solar panels
Adding solar panels may not be the easiest, or least expensive, sustainability upgrade for your home, but it will certainly have the greatest impact on both your energy bills and your environmental footprint. Installing solar panels can run about $15,000 – $20,000 upfront, though a number of government incentives are bringing these numbers down. Alternatively, panels can also be leased for a much lower initial investment.
Once operational, a solar system saves about $600 per year over the course of its 25 to 30-year lifespan, and this figure will grow as energy prices rise. Solar installations require little to no maintenance and increase the value of your home.
From an environmental standpoint, the average five-kilowatt residential system can reduce household CO2 emissions by 15,000 pounds every year. Using your solar system to power an electric vehicle is the ultimate sustainable solution serving to reduce total CO2 emissions by as much as 70%!
These days, being environmentally responsible is the hallmark of a good global citizen and it need not require major sacrifices in regards to your lifestyle or your wallet. In fact, increasing your home’s sustainability is apt to make your residence more livable and save you money in the long run. The five projects listed here are just a few of the easy ways to reduce both your environmental footprint and your energy bills. So, give one or more of them a try; with a small budget and a little know-how, there is no reason you can’t start today.