VALUE FOR GENERATIONS. Sustainable investments in global equities

Transcription

1 VALUE FOR GENERATIONS Sustainable investments in global equities

2 WHAT IS SDG? SUSTAINABLE INVESTMENTS IN GLOBAL EQUITIES SDG is an acronym for Sustainable Development Goals a set of 17 goals developed by the United Nations (UN) for the purpose of securing a sustainable future for our planet and the generations to come. SDG Invest is an investment fund offering you the possibility to obtain attractive returns by investing in sustainable companies. The investment fund invests in top financial performing companies worldwide that address the United Nations Sustainable Development Goals (SDGs). SDG Invest s guiding principle is that responsible and sustainable companies are both the future and the most economically advisable investments you can make. We believe that we are all responsible for the future and the planet we are leaving as a legacy for the next generations, and that both people and institutional investors will increasingly seek investments in companies who are run in a sustainable and visionary manner. We will start from a position of significant impact by investing in companies that operate sustainably. With the UN as the driving force, the 17 goals were endorsed by all 193 UN member states in September The SDGs are supported by targets and indicators for companies, institutions and states to use as guidance in the quest for achieving a sustainable world by The SDGs are also important to individuals, since it is expected that consumer and investor behaviour will develop towards favouring companies with sustainable values and responsible behaviour. Individuals will increasingly make active investments and buy products from sustainable companies, and demand that pension and other savings are invested and managed in a responsible and sustainable manner. It is with these considerations in mind that we have founded SDG Invest, as sustainable behaviour and economic value generation can easily be combined.

3 The 193 UN member states have developed 17 Sustainable development goals for a sustainable future

4 THE SELECTION OF COMPANIES FOR SDG INVEST SDG Invest was founded by Stockrate Asset Management and SDGlead, and is the first investment fund which actively assesses the ability of companies to combine financial performance and sustainable behaviour. FINANCIAL SELECTION For many years, StockRate Asset Management has rated global companies. From among more than 65,000 listed companies in more than 150 countries, StockRate selects the most financially viable companies, using a unique investment philosophy. These are companies with a strong earnings history, good financial strength and high economic stability. At this stage, financial considerations are the basis for the selection or elimination of companies.

5 Over the past 10 years, StockRate s approach has created attractive and stable returns above market level. This model has a proven track record. StockRate has a database of more than 65,000 companies from around the World, containing data such as historical accounting information for the last 25 years. This historical data shows the company s financial history, which is the fundamental foundation for an assessment of the company s future earnings potential. In order to be considered for selection, companies must have a long-term strategy and not be focused solely on short-term goals. This must be firmly rooted in the entire management philosophy of the company. We do not seek to achieve quick gains with short-term investments, but rather focus on creating a good, stable, long-term return while minimizing the risk. WE ARE AIMING FOR ATTRACTIVE RETURNS BUT NOT AT ALL COSTS 65,000 globally listed companies At SDG Invest we strive to deliver attractive returns for our investors in a responsible manner. Investments are only made in the World s top financial performers who act responsibly, sustainably and lead in their industries. At SDG Invest we believe the combination of financial and sustainable performance will deliver the best long-term return. Screening and rating of financial performance and sustainable behaviour Our investment model is strengthened by the tendency of consumers and investors to seek out companies who have integrated sustainability into their business models. Portfolio of companies

6 WHAT IS THE SUSTAINABILITY SCORECARD? The SDG Invest Sustainability Scorecard is an in-depth analysis based on our knowledge of long-term and sustainable business management. The Scorecard rates companies performance within leadership, sustainability and governance. ESG SCREENING The next step in the selection process is the selection of sustainable companies. In this part of the process we exclude companies who do not operate within sectors we define as being long term responsible. We discard companies who operate within sectors such as weapon manufacturing and gambling. This part of the selection process resembles a classic ESG (Environmental, Social, Governance) screening and is based on the 10 principles of the UN Global Compact. SUSTAINABILITY SCORING Lastly, we select those companies which proactively address global challenges or which have developed a strategy for integrating the SDGs into their business model. The selection is done with the application of the Sustainability Scorecard, developed specifically for SDG Invest. The companies are scored on 48 parameters which include sustainability considerations such as responsible governance, sustainable innovation, and proactive longterm business models that address global challenges and the SDGs.

7 THE SELECTION PROCESS PORTFOLIO Portfolio comprising FINANCIAL SELECTION SUSTAINABILITY SCREENING SUSTAINABILITY SCORING of the World s strongest listed companies, acting responsibly The StockRate model ESG screening Sustainability Scorecard to address global challenges and/or Strong earnings history High financial strength High economic Exclusion of companies operating in certain industries Screening and analysis of companies approach to Leadership Sustainability having a strategy on how they will contribute to achieving the SDGs. stability Governance Most of the selected companies are traditional corporations that have understood the need to adapt their business models and processes in a more sustainable direction and become proactive contributors to the urgent transformation of our World. Others are corporations who are uniquely addressing sustainability issues, such as renewable energy, food shortage, water, education, and sanitation. The SDG Sustainability Scorecard is a comprehensive analysis based on our in-depth expertise and knowledge of long-term and sustainable business management. A score is calculated based on each company s performance within the categories leadership, sustainability and governance. It is a prospective model compared to regular defensive ESG screening, as it considers how companies work to generate value for future generations. THE FINAL PORTFOLIO The result of our 3-step selection process is a portfolio comprising of the World s strongest listed companies, acting responsibly to address global challenges and/or having a strategy on how they will contribute to achieving the SDGs. SDG Invest is the first investment fund actively assessing the potential of companies to deliver strong economic performances while proactively working to address global issues and thereby sustain an environment they can continue to be profitable in.

8 EXAMPLES OF GLOBAL CHALLENGES Issues which the companies in SDG Invest actively address FOOD SECURITY By 2050, our planet will need to feed 9 billion people. This will require investments in innovative food production and a decrease in global food waste. INCLUSIVE ECONOMIC GROWTH The rising inequality between and within countries is increasingly leading to social and political unrest with the potential to destabilise the global economy in the long run. EMPLOYMENT By 2020 alone, there will be a need to create 500 million new jobs globally for people outside of the job market. At the same time, companies find it increasingly difficult to find employees with the right skill sets. CLIMATE CHANGE Investments and innovative solutions are required to secure the 2-degree Celsius target agreed upon in the Paris Agreement. A STABLE FINANCIAL SECTOR AND ACCESS TO CAPITAL It is predicted that by 2020, 2 billion people will lack access to a bank account, which is a critical issue in tackling the fight against poverty. TECHNOLOGICAL DEVELOPMENTS 43 % of the Earth s population are currently connected to the internet. But how do we secure sustainable technological innovations while maintaining our right to privacy? GENDER EQUALITY With the current pace of change, it will take 118 years before the gender pay gap between men and women is resolved. GLOBAL TRADE Since the global financial crisis, we have witnessed a move away from multilateral trade agreements, and towards more protectionist and bilateral trade systems. INVESTMENTS IN INFRA- STRUCTURE AND WELFARE There is currently a lack of long-term investments to ensure infrastructure and welfare systems are keeping pace with other developments. A SOUND GLOBAL HEALTH SYSTEM Population growth and new demographic developments (urbanisation and aging populations) will put pressure on the World s current health systems. Source: World Economic Forum

9 THE SDGs ARE UNIVERSAL Consequently, they apply for both developing and industrialised countries. THE SDGs APPLY TO EVERYONE Governments, NGOs, companies and citizens are all responsible for achieving the 17 SDGs before THE SDGs REQUIRE INVESTMENTS UN s Conference on Trade and Development (UNCTAD) estimates that it will cost between 5-7 trillion USD annually to achieve the 17 SDGs by THE SDGs ARE MEASURABLE The 17 SDGs are detailed in 169 targets and 232 indicators. These make it possible to measure how companies contribute.

10 WHO IS BEHIND SDG INVEST? BOARD OF DIRECTORS SDG Invest is founded by Stockrate Asset Management and SDGlead. The investment fund thereby draws on expertise and experience in selecting the strongest financial companies in the World as well as generating value through sustainable business innovations and responsible business conduct. Karin Verland Chairman Secretary General of DIGNITY Christian Sagild Former CEO of Topdanmark Barbara Scheel Agersnap CEO of Copenhagen Malmö Port The SDG Invest Sustainability Scorecard and associated processes are subject to an annual review by the accountancy firm PwC under the attestation standard ISAE Camilla Bredholt Founder of Doctors Without Borders (Denmark) Kim Høibye Lawyer and Partner in Njord Law Firm INVESTMENT COMMITTEE Stockrate Asset Management is an independent Danish asset management company, which manages large portfolios and advises the investment fund StockRate Invest. SDGlead advises companies on sustainability, business ethics and value creation through responsible and sustainable business practices. Bjarne Jensen CEO and Founder, Stockrate Asset Management Anne-Louise Thon Schur Partner and Founder, SDGlead Kristian Kjer Head of Asset Management and Partner, Stockrate Asset Management

11 INVESTING IN SDG INVEST CONSTRUCTION SDG Invest is established as an investment fund categorized as an alternative investment fund (AIF), which is regulated by the Alternative Investment Fund Managers Directive. SDG Invest is administered by StockRate Forvaltning, which is supervised by the Danish Financial Supervisory Authority. As an investor, you buy shares in the investment fund. These are stored on deposit in your bank account and are recorded in the VP Securities, like any other securities investment. The Scandinavian Enskilda Bank (SEB) is the depositary. This means that the investment fund s values are stored in SEB. Also, SEB issues the investment fund s shares. VALUATION Once a day, the net asset value of the investment fund is calculated, so that you always know the value of your investment. The net asset value is stated on the investment fund s website, LOW COSTS As an investor, you pay no commission fee, and there are no hidden costs or fees. The total cost is 1.35% per year. HOW TO INVEST IN SDG INVEST You can invest in SDG Invest by contacting StockRate Asset Management, your own bank or your investment broker. You will find the subscription form on the investment fund s website, The shares are issued in increments of DKK 10,000. We predict that financially strong companies addressing the SDGs will be preferred by both customers and investors and will therefore outperform comparable companies who do less or nothing. Read more about SDG Invest at

12 VALUE FOR GENERATIONS Sustainable investments in global equities Investment advisor StockRate Asset Management A/S Sdr. Jernbanevej 18D DK 3400 Hillerød Phone: SDG screening SDGlead ApS Hellerupvej 8, Gaardhuset DK 2900 Hellerup Phone: Administration StockRate Forvaltning Sdr. Jernbanevej 18D DK 3400 Hillerød Phone: