Veronica Zhang, Portfolio Manager, VanEck and Shawn Reynolds, Portfolio Manager, VanEck discuss VanEck’s unique approach to sustainable investing and the current factors driving growth in often overlooked ESG sectors.
The market for environmental sustainability is extensive, and beyond the common focus on power sources and transportation, generally untapped. Agriculture and food production are two crucial, and often overlooked, components of climate change, both of which are particularly prevalent issues as the global population increases.
Additionally, new solar capacity installations and global alternative protein industry sales are growing exponentially. This exponential growth and global trends reveal the striking opportunity for investment in a number of sectors across sustainable development. VanEck is a signatory to the Principles for Responsible Investment (PRI), which means that they have formally agreed to incorporate ESG analysis into their investment process. VanEck provides opportunities for shareholders to meet investment objectives aligned with ESG factors, while staying committed to mitigating associated risks.
The Environmental Sustainability Fund was launched by VanEck on July 13, 2021. It’s a holistic approach to sustainability that addresses land and water factors and greenhouse gas emissions through global exposure to a range of companies, without sacrificing sustainable business models over the long-run. VanEck identifies possible companies for investment by first defining the investment universe, which encompasses sectors aligned with the United Nations’ Sustainable Development Goals (U.N. SDGs).
These companies are then assessed using VanEck’s CLAW Profile. The CLAW (Climate, Land, Air, Water) metric analyzes critical environmental factors that VanEck believes companies should measure, quantify, and report, to streamline sustainability considerations into one comprehensive report. CLAW data provides a standardized way to assess a company’s engagement with climate-related risks, as well as its track record and opportunities. VanEck uses a comprehensive view of industry dynamics, analysis of the company’s governance, expected potential for return, and CLAW improvements to determine portfolio candidates. To construct the portfolio, the investment team uses quantitative analytics for risk management to optimize diversification and implement optimized security names and weights. The final portfolio consists of forty to fifty positions.
VanEck manages approximately $81.3 billion in assets, with a global headquarters in New York and robust lineups of local funds in Europe and Australia. Lead portfolio managers all have direct experience in the sectors and regions in which they invest. VanEck takes on institutional and wealth management clients, and their active funds and smart beta ETFs have won numerous performance awards.
To learn more, catch the replay of VanEck’s webcast: Sustainability Investing – Doing Good By Doing Well Over Time. Topics Include:
- The current market forces, such as inflation and resource transition, that are driving growth opportunities in areas such as renewable energy, smart resource management, agriculture technology, recycling, water and advanced materials
- An objective impact and engagement framework that alleviates some of the concerns and fallacies of existing scoring methodologies
- An investment approach to marry environmental results with business objectives to achieve lasting improvements for future generations