Capital markets exist to allocate capital to its most efficient use in order to fulfill the true purpose of capitalism - to generate human happiness and well-being.
Does free-market capitalism in its current form support the most effective and efficient allocation of resources towards such an end? We would argue that it does not and that the (dis)incentives for economic participants at all levels have been distorted to such an extent it has led to the creation of the unintended negative consequences we now face as a society.
We believe we must change the way we invest and utilize capital resources in order to cultivate positive social, environmental and economic outcomes simultaneously.
What is Sustainability?
Sustainability lies in meeting the needs of the present without compromising the ability of future generations to meet their own needs - Enough, for all, forever.
It has become abundantly clear that we cannot continue to strive for infinite growth on a finite planet. This is the fundamental truth that underpins a necessary shift towards a more sustainable form of capitalism.
In order to achieve a sustainable life for all, the rate at which we use and consume our natural resources can never be faster than the rate at which those resources can regenerate themselves.
Sustainable Investing is an investment philosophy that takes into account environmental, social and financial metrics when making capital allocation decisions.
By seeking out sustainable investment opportunities the agents of capital are leading the evolution towards a more efficient allocation of capital towards sustainable, long-term, productive and innovative assets that produce positive environmental, social and economic outcomes simultaneously.
There is no Trade-Off
There is extensive empirical research which overwhelmingly demonstrates that sustainability and profitability are not incompatible objectives. There is no trade-off or concessions - giving up profits or investment returns - in order to achieve a more sustainable outcome. In fact, the impacts of achieving sustainability on operating and investment performance of a business are mutually reinforcing.
Companies that lead in sustainability have better operational performance and are less risky. Investment strategies that incorporate environmental and social sustainability in the investment process outperform comparable strategies that do not incorporate these considerations.
Therefore, it is undoubtedly in the best interest of investors, entrepreneurs and corporate managers to incorporate sustainability considerations into their decision-making processes.
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If you would like to invest or partner with us, we can help you align your values with your investments.