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Separate Account Managers in Sustainable and Responsible Investing

Strategy Profile:
Green Alpha Next Economy Index (GANEX) Download as PDF for Printing PDF Download

Jump to: About This Strategy | About The Company | Specific Screening Information by Category


About This Strategy - [Return to Top]

Assets Under Management (AUM): $4M (in US$ millions)

Required Minimum: $100,000

Benchmark used: S&P 500 Composite Total Return

Strategy type: All Cap

Strategy description: The Green Alpha Next Economy Index (GANEX) is a passively-managed, all-cap growth equity index that invests in companies whose innovative services and products address an increasingly warmer, more populous, and resource-constrained planet. It is cross-sector, global and has been fossil fuel free since its inception on December 30, 2008. The GANEX is managed as a model portfolio for actively managed accounts. Green Alpha’s GANEX portfolio companies sit at the intersection of innovation, profitability and growth. Our Next Economy™ Investment Philosophy and Process utilizes science-driven, fundamentals-based research to invest in companies whose innovative products and services will transition us to the Next Economy™ – that is, an economy that is both indefinitely sustainable and profitable. Green Alpha starts its investment process looking at sustainability solutions, from innovation and efficiency gains to waste-to-value opportunities. Once solutions are identified, Green Alpha looks for companies whose business activities, in aggregate, improve upon or leapfrog existing or emerging technologies and services. Stocks are then selected for the portfolio using time-tested, quantitative Graham-Dodd derived valuation methodologies, which include analysis of: (1) fundamentals such as EPS growth and margin expansion; balance sheet strength including favorable debt characteristics, and favorable ratios including price-to-book; (2) accelerating sector, industry and company growth prospects; (3) high barriers to entry, strong intellectual property; (4) seasoned and effective management team that is aligned with Green Alpha’s Next Economy vision. The GANEX is a passively-managed index and separate account strategy. Next Economy companies may be admitted into the GANEX using a modified market-cap weighting, during annual rebalancing. Under specific circumstances, we may add or remove select companies from the index on an inter-rebalance basis. Green Alpha uses an internal, proprietary screening process. Portfolio Managers: Jeremy Deems and Garvin Jabusch. Mr. Deems and Mr. Jabusch have a combined 38 years of investment management experience and were co-portfolio managers together at Forward Funds from 2002 to 2007 prior to launching Green Alpha Advisors, LLC.

Strategy web link: External Link

 

About The Company - [Return to Top]

Institution Name:
Green Alpha Advisors

Approach to Sustainable & Responsible Investment: Green Alpha Advisors is an asset management firm founded in 2007 on the belief that, in order to live and thrive on our planet, we must make an inevitable economic and technological transition to sustainability. Our investment strategies address core economic concerns emerging from the risks associated with resource scarcity and the worst effects of climate change – both exacerbated by population growth. We see innovations that address these core systemic risks, while simultaneously improving economic productivity, as the greatest growth drivers of the 21st century. Green Alpha’s executive management team has more than 50 years of investment management experience. Green Alpha Advisors uses a top-down, sustainable investment philosophy and process to find the most innovative companies poised to address the macro-economic issues facing our world, which are resource scarcity and a warming climate. Green Alpha analyzes companies from both a top-down and bottom-up perspective internally through a proprietary process.

Total AUM in SRI: $44M (in US$ millions)

Research conducted: Internally

Researcher name: Green Alpha Investment Committee and portfolio managers

Contact info:
4760 Walnut Street, Suite 106
Boulder, CO 80301
USA
Phone: (303) 993-7856
Fax: (303) 568-0130
Email: info@greenalphaadvisors.com
Web: http://greenalphaadvisors.com/ (Opens in a new window)

 

Specific Screening Information by Category - [Return to Top]

Environment

  • Climate / Clean Technology: Combination of Positive and Restricted/Exclusionary Strategies - Green Alpha invests for the Next Economy – i.e. a thriving economy that is sustainable in a world that is becoming more resource-constrained and impacted by climate change. Our process begins with the macro question (“what do we need to live in a wholly sustainable economy?”) and from that macro perspective, we look to identify the most promising solutions, and the sectors and companies in which those solutions are being worked on. Our process screens out industries and companies that will never be analyzed further by us or be added to our portfolios, because we do not believe that they, on balance, contribute toward building the Next Economy. By way of example, the GANEX portfolio is fossil fuel free and has been since inception in 2008. This is because we do not see fossil fuels as part of the Next Economy. GANEX invests in the renewable energy, energy storage, and other “clean tech” sectors. Green Alpha believes great strides are being made in renewable energy, energy storage, and water technologies. Providing clean, carbon-free sources of renewable energy is a critical component of Green Alpha’s macro thesis as well as its investment philosophy. We seek to invest in companies that are solving some of the world’s greatest economic and environmental challenges.
  • Pollution / Toxics: Combination of Positive and Restricted/Exclusionary Strategies - Green Alpha invests for the Next Economy. As such, Green Alpha researches and identifies sectors and companies that will move the economy away from pollution and toxins toward sustainable options. Such sectors include, among others, renewable and sustainable building materials, agricultural processes, water processing and monitoring practices, as well as natural resource use. Green Alpha uses its proprietary research process to identify the most promising companies in these areas.
  • Other Environmental: Combination of Positive and Restricted/Exclusionary Strategies - Green Alpha uses a positive macro-economic thesis to invest in the most promising companies helping us transition to the Next Economy. Our process is science-driven and research intensive. We do not start with a list of stocks, but rather with scientific journals to find the most likely solutions to our economy’s and environment’s core challenges. By starting with science and then looking for companies to invest in, we end with a list of companies that we believe are innovation-drivers in critical sectors. Sectors and companies that are not moving us toward the “Next Economy” are naturally screened out of our process, by virtue of the fact that they never make it into the search for innovative solutions to our biggest systemic risks. With respect to the environment, in general, our macro framework envisions an economy that is wholly sustainable, one that is a closed loop cycle that does not pollute and does not deplete the earth of critical natural resources. We see value in innovation-driven and forward-looking companies that are addressing energy and environmental needs and concerns for today and the future.

Social

  • Community Development: Combination of Positive and Restricted/Exclusionary Strategies - In investing for the Next Economy, Green Alpha analyzes and invests in companies that are working to solve some of the world’s greatest economic and environmental issues. Progressive “Community Development” issues are viewed favorably and positively during the stock selection process.
  • Diversity & Equal Employment Opportunity: Combination of Positive and Restricted/Exclusionary Strategies - In investing for the Next Economy, Green Alpha analyzes and invests in companies that are working to solve some of the world’s greatest economic and environmental issues. During stock selection, companies are viewed positively if they address Diversity and EEO issues.
  • Human Rights: Combination of Positive and Restricted/Exclusionary Strategies - In investing for the Next Economy, Green Alpha analyzes and invests in companies that are working to solve some of the world’s greatest economic and environmental issues. Companies addressing human rights issues are viewed favorably during the stock selection process.
  • Labor Relations: Combination of Positive and Restricted/Exclusionary Strategies - In investing for the Next Economy, Green Alpha analyzes and invests in companies that are working to solve some of the world’s greatest economic and environmental issues. Companies addressing labor relations issues are viewed favorably during the stock selection process.
  • Sudan: No Investment

Governance

  • Board Issues: Combination of Positive and Restricted/Exclusionary Strategies - In identifying Next Economy companies, Green Alpha attempts to invest in companies that are well-run. GAA favorably views diverse boards and strong governance practices.
  • Executive Pay: Combination of Positive and Restricted/Exclusionary Strategies - Green Alpha attempts to identify and invest in forward-thinking and innovative companies. Through this process, Green Alpha does review executive pay issues.

Products

  • Alcohol: Combination of Positive and Restricted/Exclusionary Strategies - Green Alpha invests for the Next Economy – an economy that is sustainable and economically viable – in the face of climate change and resource scarcity. We seek to invest in solutions to these global and systemic risks.
  • Animal Welfare: Combination of Positive and Restricted/Exclusionary Strategies - Green Alpha invests for the Next Economy – an economy that is sustainable and economically viable – in the face of climate change and resource scarcity. We seek to invest in solutions to these global and systemic risks. Green Alpha will analyze animal welfare issues during stock selection process.
  • Defense/Weapons: Combination of Positive and Restricted/Exclusionary Strategies - Green Alpha invests for the Next Economy – an economy that is sustainable and economically viable – in the face of climate change and resource scarcity. We seek to invest in solutions to such global systemic risks. While Green Alpha does not invest in weapons companies, Green Alpha will invest in companies that service the defense department (e.g. providing solar panels for an army base). We believe there are some instances where a company, in aggregate, is a Next Economy company despite providing some defense services or technology.
  • Gambling: No Investment - Green Alpha has not invested in, nor plans to invest in, gambling stocks as we do not see this sector assisting in the move toward the Next Economy.
  • Tobacco: No Investment - Green Alpha has not invested in, nor plans to invest in, tobacco stocks as we do not see this sector assisting in the move toward the Next Economy.

Other

  • Other/Qualitative: Green Alpha Advisors uses a top-down, sustainable investment philosophy and process to find the most innovative companies poised to address the macro-economic issues facing our world, which are resource scarcity and a warming climate. Green Alpha analyzes companies from both a top-down and bottom-up perspective internally through a proprietary process.
  • Proxy Voting: Actively voted by my institution for this investment strategy in support of environmental, social or governance issues in accordance with formal guidelines

 

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