Living Planet Fund - Renewable Energy

The Living Planet Fund – Renewable Energy is a renewable energy themed equity fund with a long-term investment strategy. Managed by Sarasin Bank & Co., it was launched in January 2010, with the aim of offering retail and institutional investors the opportunity to align ethical values with investment growth in this sector. As energy demands grow and fossil fuel reserves decline, the economic future for renewable energy looks bright.

The fund builds its portfolio through selecting investment in companies at different levels of the energy value chain: generators, distributors and manufacturers of industrial and consumer products. Particular attention is paid to innovative, well-capitalized enterprises in renewable energies such as solar, geothermal, water, biomass and wind power. The fund seeks attractive investment targets in energy efficiency and energy management. Fossil fuels and nuclear power are excluded from the Fund.

We use the components of the MSCI World index as our starting point – this widely-used benchmark of leading stocks quoted on the exchanges of developed countries lists over 1,500 companies. Preliminary analysis indicates that approximately 800 of these comply with broad RI (Responsible Investment) criteria.

Our partners at Bank Sarasin review the economic potential of companies. Companies must have a market capitalization of at least US$500 million to ensure liquidity and a positive cash flow and earnings history. We analyze relative performance against competitors and sector growth opportunities to identify promising investment targets from a purely business perspective.

Our information sources include company reports; analyst briefings; independent research reports; media monitoring and news services, Internet material and specialized electronic media; company visits and management contacts as well as custom research and input from specialized research institutes and NGOs.

We then assess in more detail the social and environmental policies of these targets according to the following criteria:

• Societal considerations: public commitment on social standards; relationship with employees, suppliers and other stakeholders; health and safety; employment policies; community involvement. 
   
• Environmental considerations: corporate policies; compliance with legislation; environmental impact statements; and use of environmental management systems.
   
• Production processes and product life cycles: energy efficiency and sustainability; emissions control; elimination of pollutants and harmful chemicals; water management; waste minimization; recycling.
   
• Certification: compliance with recognized standards such as ISO 14001; Forest Stewardship Council; Marine Stewardship Council; International Labour Organization.
   

We give special consideration to companies whose products and services are relevant to conservation and the sustainable use of natural resources. Working with our environmental advisors at WWF, we have defined eight investment ‘themes’ – promising business sectors where the power of the private investment can make a significant contribution towards resolving environmental and sustainability challenges. This also makes sense from a financial perspective: global demand for environmentally-relevant products and services is likely to increase and the stock of well-managed enterprises in these sectors should offer investors better than average returns in the mid to long term.