We believe that rewarding positive environmental and social change with investment capital can amplify that change. At Prentiss Smith & Company, we call this sustainable investing. While the semantics have evolved since we started in 1982–to include terms like ESG investing, socially responsible or impact investing–what has not changed is our belief in sustainable investing as a form of activism. For too long, people have separated their ideals from their economic decisions. The essence of sustainable investing is that it emphatically ties together the environmental and social goals shared by so many with the daily economic decisions that face us all.
At the same time, we pursue the strongest possible investment returns for clients. We believe institutions with a sustainable bottom line are actually better positioned for long-term financial growth, compared to those placing short-term profit over the well-being of people and planet. Companies that anticipate increased stakeholder demand for transparency, equity, and environmental awareness, we believe, will capitalize on their foresight. We want you to capitalize on it, too.
We do not consider investments closely involved with fossil fuel production, marketing, or distribution, defense or weapons, retail gun sales, private prisons, mining, agrochemicals, plastic production, tobacco, gambling, or pornography.
We seek out institutions with exceptional positions on environmental and social issues who we believe have good governance, strong fundamentals and a favorable financial outlook compared to market expectations.
We verify our initial assessment through extensive additional research, in some cases opening direct dialogue before investing. If, on balance, we feel an institution reflects client values, it is approved as a sustainable investment.
Once we hold an ownership stake, we strive to play an activist role through proxy voting, shareholder resolutions and direct engagement on issues where we believe corporate progress can drive systemic change.
Our sustainable investment research includes a detailed review of an institution’s environmental impact and initiatives, its products and services, its posture toward social and human rights issues, transparency, and governance. This research often includes direct conversations with the institution, which can provide an early opportunity to push for better policy positions.
We seek out investments that promote a shared baseline of human rights, fulfillment of basic needs, equal access to opportunity, and a diversity of perspectives.
We believe there is an urgent imperative to reduce the world’s emissions of carbon dioxide. As sustainability investors, we believe this requires avoiding the industries that are driving climate change.
When institutions practice transparency, company leadership is accountable, and all stakeholders are honored, we believe opportunities for success are amplified.
Companies that target ambitious reductions in waste, water, or energy use, address air quality or deforestation in their supply chains, or use sustainable sourcing can make appealing investments. Transparency is a key first step.
We give greater consideration to institutions that promote the advancement of women, LGBTQ people, people of color, immigrants, the disabled, and others who have not historically received equitable treatment.
No company or bond issuer is perfect. But we believe it is possible to weigh the evidence and make investments that have a net positive impact on our world.
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