Fossil Free & Impact Investing

Fossil Free and Impact Solutions for Greater Sustainability

According to the Responsible Investment Association, global responsible investment assets reached US$21.4 trillion in 2014, a remarkable increase of 61 percent from 2012. One reason for this explosive growth is that increasingly, investors are recognizing that environmental, social and governance issues have financial consequences. In fact, a growing body of evidence suggests that sustainable investing can help enhance portfolio safety and returns.

Beyond seeking additional financial returns, a growing number of people and organizations now prefer sustainable investing because it better aligns with their values. According to KPMG’s 2014 report, Investing in the future, “Environmental awareness has continued to grow and is becoming an increasingly important purchasing criteria.”

Approaches to Sustainable Investing

We align our portfolios with your social and environmental values: Our Genus Fossil Free portfolios exclude all companies directly involved in extracting, transporting, processing or storing fossil fuels. They also exclude industries like gambling, tobacco, adult entertainment and firearms.

Why? Companies that have a negative impact on the environment or society can suffer from financial liabilities and unsustainable business models. Many investors are also eliminating fossil fuels from their portfolios because they present a “stranded asset” financial risk. Long-dated energy reserves, such as coal, oil and natural gas, stand to lose substantial value over time due to changing regulations and the rise of renewable energy.

We screen out companies with poor performance on environmental, social and governance (ESG) issues. We instantly sell businesses that get involved in ESG controversies.

Why? Investors respond strongly to negative ESG news. Additionally, given the growing social demand for sustainability and transparency, the financial market focus on ESG performance is likely to expand further.

On the flip side of the coin, we invest in global companies that are recognized leaders in sustainability. Our Genus Fossil Free portfolios favour leaders in renewable energy and industries committed to mitigating climate change. We use ESG performance to identify better investment opportunities.

Why? All our investments already fall under the umbrella of responsible investing. Several studies have proven the correlation between a company’s financial performance and its commitment to good ESG practices.

Our unique investment approach involves collaborating with clients to shape program objectives and catalyzing industry improvement through ESG proxy voting, management communication and shareholder resolutions.

Why? As owners and managers of significant capital, we can influence the business activities in the economy. Each of these programs is designed to use our power as shareholders to change how companies are run and increase levels of corporate social responsibility.

We identify the long-term trends unfolding right now to inform our investing approach to add financial performance while helping expand positive social and environmental impact globally.

Why? We believe in the concept of win-win, and that sustainable economic global growth can only occur if benefits are shared more equally. As such, we strive to invest in companies that are tackling areas of inequality, such as access to education, healthcare, financial services and technology.

Innovative Sustainable Solutions

Are you interested in sustainability? You’re not the only one. At Genus Capital, we offer a range of specialized solutions to meet the needs of investors who are interested in sustainability. We can customize any of the following portfolios to improve the fit:

At Genus Capital, we believe great investing happens when experienced experts collaborate to develop and execute aligned strategies. Our Multi-Manager Portfolios bring together our expertise in developed market stock selection and asset allocation with the complementary skillsets of our institutional sub-advisors, Addenda Capital and Wells Capital.

Montreal-based Addenda Capital is one of Canada’s leading bond houses. It manages our high-quality fixed income mandates, which include commercial mortgages as well as corporate and government bonds. Boston-based Wells Capital is a leading global money manager, and is responsible for security selection on our emerging markets equity mandate.

We can customize our Multi-Manager Portfolios in a number of ways. First, we set up your clients’ investments to match their specific needs for income, growth and liquidity. For clients seeking tactical asset allocation, we can proactively tilt portfolios toward attractive areas and away from those that present more risk. We can also tailor the specific safety and yield characteristics of the holdings through our industry-leading low-volatility, high-dividend mandates. If you want additional protection from environmental, social and governance risks, we can customize the portfolio to address that too.

Our Genus CanGlobe and Genus Dividend strategies provide strong diversification and are designed to maximize risk-adjusted returns. These stock mandates combine Canada and the rest of the world into a single optimized strategy that emphasizes top industries in each region. They are invested at around 40 percent Canada, 60 percent global, and are tilted toward the most attractive countries on a monthly basis. Genus CanGlobe seeks to maximize exposure to our highest-ranked stocks with market-levels of risk, while the Genus Dividend strategy provides better income and safety.

Thematic mission-based investing is another significant growth area in sustainability. Our strategy seeks to make positive social and environmental impacts in addition to generating better financial results. This mandate focuses on investing in global companies who are leaders in areas like renewable energy, energy efficiency, water and waste management, low- and negative-impact products and sustainable agriculture, as well as access to healthcare, education and technology. This global solution is one of a kind in Canada.

For portfolios larger than $2 million, Genus offers fully customized environmental, social and governance (ESG) investment strategies. That means if you have a specific idea about a sustainable approach that’s of interest, we can use our research technology (RAMKit) to develop, test and execute a strategy that matches your philosophy. These solutions are designed from scratch to integrate your ESG and financial security selection preferences. Genus Sustainable Strategies seeks to deliver “perfect fit” investment solutions grounded in solid research, robust risk management and innovative design.

Ready to join the Fossil Free movement?

With the right expertise, any portfolio can incorporate divestment solutions. Whether you represent a pension fund, a foundation, an Indigenous community fund or retail wealth clients, we can help you explore and move to Fossil Free® growth.

Please use the contact form to let us know what information you need or how we can help you.

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