When investing in the current environment, how do you think about long-term themes such as Environmental, Social and Governance (ESG) factors?
There are several different timeframes over which to think about ESG.
The development of the de-carbonised economy by its very nature will take a long time.
There will be three periods broadly:
Once you understand that, it’s really about characterising companies in terms of where they sit in these transitions.
Are their business models aligned with any one specific phase?
If so, are they making their way across those phases to an environment where they can contend with the de-carbonised, ESG kind of world?
Or are their business models fairly constrained to one of those thematics?
In the latter case we are very careful about how and if we invest in those sectors because this transition will take place over the course of the next 10 years.
That’s definitely within the context of an investible timeframe.
So we have to be very careful about assessing a company’s ability to make the transition.
Find out about
Brenton is a portfolio manager with Pendal’s Australian equities team. He co-manages Pendal MidCap Fund and our natural resources portfolio, drawing on more than 25 years of expertise in resources, derivatives, investment banking and private equity. He is a member of the CFA Institute.
Pendal MidCap Fund features 40-60 Australian midcap shares. The fund leverages insights and experience gained from Pendal’s access to senior executives and directors at ASX-listed companies. Pendal operates one of Australia’s biggest Aussie equities teams under the experienced leadership of Crispin Murray.
Pendal is an independent, global investment management business focused on delivering superior investment returns for our clients through active management.
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