The primary purpose of these strategies is to provide our clients with investments that do not cause harm or align with their values.

Broadly defined, sustainable investing simply means taking ESG criteria into account. Yet this definition disguises the complexity of an industry that, at its worst, can be prohibitively convoluted. According to the Institute of International Finance, there are over 80 different terms used to describe approaches to sustainable investing. Despite this complexity, we see the industry coalescing around three primary approaches:

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Exclusions

In the world of responsible investing, one key strategy that stands out is "Exclusions." This approach focuses on providing clients with investment options that are in line with their values and ethical principles. The primary goal is to avoid investments that cause harm or go against internationally recognized norms. Let's delve deeper into the concept of exclusions in ethical investing.

The Purpose of Exclusions


The primary purpose of exclusionary strategies is to align investments with the values and principles of the investor. By excluding companies or sectors engaged in these activities, ethical investors aim to contribute to a more sustainable, ethical, and socially responsible world.

Impact of Exclusionary Strategies


Exclusionary strategies not only allow investors to invest in line with their values but also send a message to excluded industries that ethical considerations matter. Over time, such strategies can contribute to a shift in corporate behavior and encourage companies to adopt more responsible practices.

Sustainable Thematic and Impact Investing

Sustainable Thematic and Impact Investing represents a dynamic approach to financial growth with a purpose. At its core, it's about more than just maximizing profits; it's about mobilizing capital into companies that offer innovative solutions to some of society's most pressing challenges. Let's dive deeper into this powerful investment strategy and its transformative potential.

Understanding Sustainable Thematic and Impact Investing

Sustainable Thematic and Impact Investing is a forward-thinking investment strategy designed to address global challenges while generating financial returns. This approach combines the principles of sustainability, thematic focus, and impact to create a powerful synergy.

  • Sustainability Sustainability encompasses the commitment to environmental, social, and governance (ESG) factors. It's about ensuring that investments align with a sustainable and ethical future, preserving the planet, and promoting social equity.
  • Thematic Focus Thematic investing centers on identifying key global themes or trends that have the potential to drive long-term growth. These themes are often rooted in sustainable solutions, such as clean energy, healthcare advancements, or education innovation.
  • Impact Investing Impact investing goes beyond financial returns. It targets investments that intentionally create a positive impact on society and the environment, addressing specific challenges, from climate change to poverty alleviation.




The Purpose of Sustainable Thematic and Impact Investing:

The driving force behind these investment strategies is to mobilize capital effectively. By directing investments into companies that offer solutions to society's challenges, we can

  • Accelerate Positive Change Sustainable thematic and impact investing accelerate the development and adoption of innovative solutions, making a tangible difference in the world.
  • Align Capital with Values Investors can align their capital with their personal values and beliefs, ensuring that their financial success contributes to a better, more sustainable world.
  • Drive Innovation Investments in companies committed to tackling societal issues encourage innovation and foster a culture of problem-solving.
  • Generate Competitive Returns These strategies have proven that it's possible to achieve financial success while doing good.

ESG Risks and Opportunities

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Environmental(E)
  • Biodiversity and Land Use
  • Water Resources Manangment
  • Raw Material sourcing
  • Climate Change
  • Pollution & Waste
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Social(S)
  • Human Capital
  • Supply Chain Labor Standards
  • Health and Safety Risks
  • Access to Goods And Services
  • Health and Safety Risk
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Governance(G)
  • Board Diversity
  • Ownership
  • Accounting
  • Competition
  • Exective Pay

Sustainable Investing

Motivations for Investing Sustainably.

01

Avoid harm

Clients who wish to avoid investments in controversial business-activities or in companies that violate international norms and standards.

02

ESG aware

Clients who wish to integrate ESG considerations, with the goal of mitigating risks or identifying ESG opportunities. Increasingly, institutional investors may also view ESG integration as a fiduciary duty.

03

Impact oriented

Clients who wish to invest in companies or projects that have a positive impact on people and/or planet and which address one or more of the UN SDGs

Sustainability Is Part Of The Investment Process

01

Impact oriented

Furthermore, our aim is to integrate significant sustainability factors into every investment scenario, encompassing matters related to climate-related risks and potential advantages. Our commitment to making investments hinges on our comprehensive understanding of the situation, and the depth of our understanding will subsequently shape our confidence in an investment opportunity, impacting both the allocation of resources and our assessment of the potential gains
As an illustration, when considering an investment in an insurance company, our portfolio managers will pay close attention to the company's vulnerability to climate change and the potential impact of rising sea levels. Additionally, we will assess both the challenges and prospects associated with our investments in fossil fuels, including those in oil and natural gas enterprises.

02

Positive change can take time

We believe ESG factors affect investments unevenly. Environmental improvements take time, but environmental accidents can harm quickly. Social improvements are usually long-term, exceeding our 2-3 year horizon. Yet, like environmental issues, social problems can quickly hurt a company's reputation and value.


ESG

Arequitie is committed to being a responsible investment firm that integrates the consideration of environmental, social and governance (ESG) factors into the core of our process. A sound ESG approach both resonates with our principles and values and can also drive sustainable value for our investors by building enduring businesses. ESG Integration in investment management represents a significant shift towards responsible and sustainable investing. It recognizes that financial success should not come at the expense of environmental harm, social inequality, or poor corporate governance. Arequitie and other forward-thinking investment firms are at the forefront of this movement, fostering a new era of investment that prioritizes the triple bottom line – People, Planet, and Profit.

Why ESG Integration Matters


The incorporation of ESG factors into investment strategies is not merely a matter of ethics; it is also a sound business practice. Companies that excel in ESG tend to exhibit greater resilience, lower risk profiles, and enhanced long-term performance. ESG integration enables investors to :

  • Identify Opportunities : ESG integration helps identify companies with sustainable and ethical practices, often offering attractive investment opportunities.
  • Mitigate Risks : Assessing ESG factors also allows investors to spot potential risks associated with poor environmental management, social controversies, or governance issues.
  • Promote Positive Change : By directing capital towards companies that uphold high ESG standards, investors can encourage positive corporate behavior and drive responsible business practices.

At Arequitie, our clients are at the center of everything that we do. Understanding each client’s unique perspective is our priority, to ensure investment strategies are tailored to their specific needs, wishes and circumstances.

Sustainable investing is part of this journey. Sustainability preferences will be integrated formally into the Arequitie Advisory Process in a staggered rollout. The process starts with dialogue These insights enable the identification of relevant investment approaches that can best achieve financial and sustainable objectives. Motivations for investing sustainably are varied and complex, but we have identified three main motivations for investing sustainably.

Values-Based

Most sustainable investment strategies at Arequitie Investment exclude firms that derive a significant portion of their revenue (5% or more) from the following business activities: conventional weapons and firearms, tobacco, adult entertainment and gambling. For thermal coal power generation and mining, a revenue threshold of 20% is applied. Over time, this threshold may be reduced in order to reflect an ongoing transition to a low carbon economy.