Janus Henderson Global Sustainable Equity fund
Contribution to UN SDGs
One of the environmental themes sitting under the 4 mega trends of the strategy is water management
Long track record
The fund was launched in 1991 with environmental and social considerations embedded in the investment process
Since its inception in the early 90s the fund has delivered annualised returns of over 8.5%
The fund looks to select companies providing solutions to environmental and social challenges whilst displaying consistent revenue growth and decent cash flows. The approach is explicitly low carbon (with a footprint around 85% lower than the MSCI World Index) and aims to outperform the market over the long-term through a diverse portfolio of equities.
The aim is to generate positive impact from allocating capital to companies with beneficial goods or services, and avoiding those with harmful goods or services.
The team have identified four environmental and social megatrends, which they believe are pressuring the sustainability of the economy. These are:
- Population growth
- Aging population
- Resource constraints, and
- Climate change.
Underpinning these are 10 separate themes supporting the UN Sustainable Development Goals (SDGs), two of which are water management and environmental services. It’s through this multi-thematic investment strategy that the manager selects appropriate investments, whilst also incorporating environmental and social considerations.
It’s believed that water is under pressure from both the supply side (insufficient fresh water, uneven distribution and climate change) and the demand side (increasing use in agriculture, industry and municipal/residential areas). As a result, there is a need for considerable infrastructure investment, coupled with behavioural changes, to try and bridge the supply gap. Water management only makes up 1% of the portfolio through investments in two companies spanning across utilities, technology and infrastructure.
There are a number of negative impacts on the environment which stem from population growth and a linear economic model. One of these is the significant amount of waste that is produced. Waste management, environmental protection & remediation, pollution control and the creation of circular business models are all required.
Environmental services makes up a large chunk of the portfolio, at around 5%. This gives exposure to companies involved in recycling & circular economy, natural capital, sustainable packaging, waste management and finally environmental engineering & infrastructure.
What they do
|Avery Dennison||The global provider of packaging and label solutions, whose products are designed to reduce waste and increase the recyclability of packaging.|
|DS Smith||A leading manufacturer and recycler of corrugated packaging products in Europe. The company aims to create a completely circular supply chain, thereby achieving zero waste.|
|Evoqua Water Technologies||A water technology company with the sole focus on water treatment. It serves municipal and industrial customers and its solutions span the entire water life cycle, from extraction and purification to waste treatment and reuse.|
The fund may not provide as strong of an exposure to the water and waste theme as other, more thematic funds but it does clearly align with the theme to a degree. Moreover, the portfolio as a whole contributes 59% and 65% to the two water-focused Sustainable Development Goals.