Earth Portfolios

At EBI, we believe that ethical investing is the future. Through our diverse range of sustainable investment solutions, we incorporate Environmental, Social and Governance (ESG) concerns into our investment decisions with the goal of improving the world.

Our ESG-integrated portfolios are grounded in academic research and offer access to systematic return premiums, while pursuing positive social and environmental change.


A Primer on ESG Investing

Environmental Issues

How companies interact with the environment

Social Issues

How companies interact with their communities

Governance Issues

How companies conduct their business activities

Our goal with ESG investing is to earn a financial return for investors using these criteria:

A variety of research has shown that it’s not principles over performance.


Scholars and investors have published more than 2,000 empirical studies and several review studies on this relationship since the 1970s. The findings of these studies contradict the common perception of many investors that implementing ESG policies reduces performance, and in fact, suggests there is a positive relation between ESG and returns*.

Impact investing

Funds companies that focus on addressing social and environmental issues.

Inclusion-based investing

Funds companies that exceed certain ESG criteria.

Exclusion-based investing

Screens out companies that do not meet specific ESG criteria or have a negative ESG impact.

ESG Integration

Includes environmental, social and governance concerns in a predefined investment strategy (like an evidence based portfolio).

What does ESG Cover?

Environmental

• Air & Water Pollution
• Biodiversity & Deforestation
• Climate Change
• Energy Efficiency
• Waste Management
• Water Scarcity

Producing more output with less natural resources, energy, water, waste and pollution.

Social

• Community Relations
• Customer Satisfaction
• Employee Engagement
• Gender & Diversity
• Human Rights
• Labour Standards

Improving relations with key stakeholders: employees, customers, suppliers.

Governance

• Audit Committee Structure
• Board Composition
• Bribery & Corruption
• Executive Compensation
• Lobbying Activities
• Political Contributions

Reducing risk through board oversight and risk controls.

Our Investing Philosophy

EBI provides evidence based investment management to a select group of the UK’s most knowledgeable and forward-thinking financial advisers. Our investing philosophy combines more than six decades of market data, Nobel Prize-winning academic research and behavioural finance.

We have been monitoring the ESG fund universe for several years, awaiting suitable funds to satisfy our evidence based approach and engaging with fund providers to develop and launch a range of ESG funds. Our current Earth portfolios have 46% of the equity portion invested in sustainable funds. We plan to incorporate more ESG fund launches, further increasing the sustainability of our Earth portfolios in the future.


A Short History of ESG

The first publicly available ethical fund was the Pax World Fund, which two members of the United Methodist Church in the US set up in 1971. Two years later, the investment arm of the Methodist Church in the UK put forward a proposal for the first UK ethical investment trust. By the end of the decade, ethical investment, underpinned by certain religious groups’ ethics, had become part of the investment landscape.

Through the mid-to-late 20th century, two dominant themes started to emerge: concerns about the effects of inequality in society and the environmental effects of human activity. Environmental concerns took to the main stage in 1972 when the United Nations Environment Program was established. This was the precursor to several United Nations environmental initiatives, culminating in the 1997 Kyoto Protocol, which committed signatories to reducing greenhouse gas emissions. This was followed by the 2015 Paris Agreement, which set the target of global warming to no more than 2 degrees Celsius above pre-industrial levels.

Find out more with our ESG-focussed events and webinars

We invite the best in breed speakers to discuss ESG and sustainable investing, with live webinars being held throughout the summer and beyond.

A Note on Sovereign Bonds

Companies act in a world where, for the most part, right and wrong are clearly defined and the investors who provide the capital can exercise their judgement on those companies that act in a negative way. Approaches to issues such as corruption, pollution and human rights vary from country to country, with some exceeding internationally set standards and others falling below it.

It’s far more difficult for capital providers to change the behaviour of sovereign nations. Although EBI has yet to find a suitable ESG bond fund, we will continue to monitor the bond fund universe for appropriate opportunities.

Download Earth Portfolios Brochure