Sustainable investing is much more than risk management
By Oliver Jones - May 25, 2022
Money Marketing recently carried an article (you can read it here) about NextWealth's report on sustainable investing. They have deliberately dropped the term ‘ESG’ from the title of the series of reports.
The reason given is because their research with financial advisers highlighted how the use of the term ESG in client conversations is at odds with how investment providers define it. They say that investment providers use it to describe an objective measure of risk but advisers regard it as a label for sustainable investing. They believe using it for both is creating confusion.
The terminology used to describe ESG is complex and can be confusing (our white paper on ESG Investing can help with this: you can download it here). However, we don’t agree that all investment providers are using it in relation to risk rather than to meet the sustainable preferences of clients.
We certainly put sustainable factors at the forefront of our investment research, as outlined below in the latest of our ‘Impact in Investing’ showcases.
UN Sustainable Development Goal 3: Good Health & Well-Being
The UN Sustainable Development Goal 3 (SDG 3) aims to ensure healthy lives and promote well-being for all ages.
The high-level goal has 13 underlying targets to achieve the goal and 28 indicators that track progress toward completion. These targets are related to the prevention of disease, reduction of mortality, and global healthcare availability. For more information, visit: https://sdgs.un.org/goals/goal3
Below are three companies and foundations supported by funds we use in our Sustainable World portfolios that are providing products and services that directly contribute to helping meet UN SDG 3.
Nomura ACI Emerging Markets Sustainable Impact & The Stowers Institute for Medical Research
Nomura ACI Emerging Markets Sustainable Impact is an example of how funds in Sustainable World portfolios go above and beyond to positively impact society.
American Century Investments (ACI), the manager for the Nomura ACI Emerging Markets Sustainable Impact fund, has a unique ownership structure due to its largest shareholder being the Stowers Institute for Medical Research (which owns 44% of the firm at the time of writing). This means ACI make regular contributions to the Stowers Institute in the form of dividend payments. Since the foundation was established in 1994, ACI has made over USD$1bn in contributions to support the Stowers Institute’s research.
About the Stower’s Institute for Medical Research
The mission of the Stowers Institute for Medical Research is to “make a significant contribution to humanity through medical research by expanding our understanding of the secrets of life, and by improving quality of life through innovative approaches to the causes, treatment and prevention of diseases.”
Additionally, the Stowers Institute has its own graduate school, that provides opportunities and initiatives for scientific learning and the development of next-generation scientists. This includes PhDs and undergraduate programs.
Nomura ACI Emerging Markets Sustainable Impact is featured in all the PortfolioMetrix Sustainable World portfolios.
Thermo Fisher Scientific Inc.
Thermo Fisher’s mission is “to make the world healthier, cleaner and safer” which they do by developing faster and better diagnostics tests, and more accurate research tools.
The company has been at forefront of the fight against COVID-19, being one of the first to mass-produce testing kits (producing 5 million per week in March 2020) and their equipment has also been used to develop vaccines to fight the virus.
Thermo Fisher Scientific is held in: WHEB Sustainability Fund
Novocure is a US based oncology firm pioneering treatment for tumours in order to extend the lives of those with the most aggressive forms of cancer.
Founded in 2000, Novocure has developed a new way to treat cancer, targeting tumour cells without damaging healthy tissue. When compared to chemotherapy alone, studies have shown that almost three times as many people live beyond five years, and patients experience fewer side effects.
Novocure’s treatments for glioblastoma and mesothelioma (cancer in the lining of the lungs) are now FDA approved and medical research and trials are already ongoing for a variety of different cancer types with the goal of using similar technology to treat a wider number of patients.