A Different Shade of Green

SRI or Green investing is starting to widen across the world. Investing is not an easy activity. In many markets around the world, a majority of the managed funds do not beat the average market’s performance like the S&P 500 in the US or the ASX 200 in Australia or the BSE Sensex in India.

For SRI investing it becomes a bigger issue. A set of green screens need to be used apart from the normal selection criteria of various funds.

When the Bill and Melinda Gates foundation was criticized that in a lot of the areas where their foundation was helping solve some problems, the investment arm of the foundation was investing in companies which were creating environmental and social problems in those areas.

What was the response? In a crude form – it is too hard to do that.

In this scenario, even if you want do good, SRI investing is not easy.

Socialfunds.com reports on Spectra Green Fund which have a different approach and philosophy. Their approach is based a real world approach where they believe that sustainability brings about competitive advantage to a firm and hence, they apply a green screen after selecting for other variables.

The Spectra Green Fund’s strategy is to look for growth companies first and then apply its sustainability and green screens. According to Zachary Karabell, executive vice president, chief economist and portfolio manager at Alger, this strategy is different because most green funds apply green screens first.

“We live in the real world, not the ideal world,” Karabell told Socialfunds.com. “Increasingly, it looks like there is a correlation between growth companies, innovation, and sustainability. We are focused on companies that are making their supply chain more environmentally friendly or bringing sustainable products to market that fulfill pressing global needs.”

“In the past, green investors have steered clear of resource intensive companies. Yet our world is driven by these companies, many of which are finding new ways of using cleaner fuels, shifting their energy use and changing their carbon-footprints. There is a surprising compatibility between companies making money and also dealing with their environmental impact,” Karabell added.

Karabell maintains that Spectra Green Fund has a clear agenda whose managers and analysts think is helping investors make money as they support innovative and far-thinking companies.


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