MB Capital work with the ESG criteria as a framework to screen investments or to assess risks in investment decision-making. The ESG screening criteria includes 3 factors to take on board, the first of which is Environmental.

Environmental factors determine a company’s management of their environmental impact and environmental focus. This topic includes a large variation of issues that must be scrutinised before determining whether it falls within the environmental category.

• Climate change policies, plans, and disclosures.
• Carbon footprint and carbon intensity (pollution and emissions).
• Greenhouse gas emissions goals and transparency into how the company is meeting those goals.
• Usage of renewable energy including wind and solar.
• Recycling and safe disposal practices.
• Green products, technologies and infrastructure.

Social factors review how a company considers people and focuses on employee relations and diversity, working conditions, local communities, health and safety, and conflict.

• Employee treatment, pay, benefits, and perks.
• Employee training and development.
• Diversity and inclusion in hiring and in awarding advancement opportunities and raises.
• Ethical supply chain sourcing, such as conflict-free minerals and responsibly sourced food and coffee.
• Consumer friendliness, customer service responsiveness, and history of consumer protection issues including lawsuits, recalls, and regulatory penalties.

Governance factors look at workplace policies and how a company is run. The focus in this section is mostly based on the company’s policies and monetary involvements of the company. There are a whole range of areas to cover but below are some of the key indicators.

• Executive compensation, bonuses and perks.
• Compensation tied to metrics that drive long-term business value, not short-term EPS growth.
• Diversity of the board of directors and management team.

How does MB Capital invest into ESG investments?

Here at MB Capital we access the global markets and have access to an array of available products  that ensures our clients have the flexibility to choose companies that reflect their own personal values whilst being able to make the most out of their ESG investment portfolio. Clients are also able to choose their preferred vehicle when investing into ESG and have the option to invest via traditional investment accounts, ISA’s, SIPP’s and Corporate accounts. Our focus at MB Capital is the client and we work one on one with each and every client to ensure they fully understand every aspect of their investment before making a final decision.

Plant a tree pledge – We plant a tree on behalf of every client that invests in an ESG themed portfolio with us

The Private Client Investment team within MB Capital have launched a Clean and Sustainable investment portfolio (CSI).

The investment objectives of the portfolio can be encapsulated in three directives:

• Capture broad exposure to a global drive and initiatives for a clean and sustainable future, underpinned by worldwide government, corporate and society focus and funding.
• Concentrate on proven, blue chip, clean and sustainable entities that are showing solid dynamic growth.
• Diversify across the range of entities in the sector to reduce volatility and risk, while gaining exposure to specific and global potential returns.

Diversification

We strongly believed from our in-depth research and modelling that this is an exciting growth prospect for the industry and sector. To that extent we took a prudent approach to investment strategy to gain broad exposure to the sector.

A summary of the portfolio:

• The portfolio is a graded mix of eight of the top Clean, Green and Sustainable Exchange Traded Funds (ETFs) on the market, with a high level of liquidity.
• Each ETF is a unique combination of their chosen clean and sustainable entities/corporations (up to 20 companies in each ETF)

The ETFs in the portfolio cover the range of exposure to the sector, for example broad global corporations, technology companies, specific alternative energy focus funds (e.g. solar and wind), plus many more.

The Biden Factor

The US now has a new President in Joe Biden. A key part of this successor’s electoral platform was a drive for a Clean and Sustainable future, not just for the US, but globally. Over the Trump term the US did its best to push ESG initiatives into the background. The new President now wants to rectify and turn that position around and take “…drastic action….”.

The man and his regime also comes with significant credentials to drive his government’s initiative:

• He wrote one of the first bills on climate change in the senate
• As Vice President to Barack Obama, he drove the largest investment in clean and sustainable initiatives by the US government thus far – $90 billion
• He also led laws in the doubling of efficiency in US car fuel consumption, leading to a lowering of 72 billion barrels of oil consumption

The Biden Manifesto

As mentioned, the new President not only wants the US to be clean and sustainable and zero net carbon producers, but also wants the world to get in line to do the same.

Key President clean/green/sustainable commitments:

• As soon as possible, the US re-join the Paris Accord on Climate Change (which Trump withdrew from)
• A commitment for the US to be a clean and sustainable society by 2050 with net zero emissions
• An initial injection of $1.7 trillion to clean/green/sustainable initiatives, which includes significant investment in research and development in the sector
• To become the world leader in ESG development, influencing world economies to follow and adopt the US initiative

You just need to read the tweets/responses of global leaders, upon Biden’s successful win for the presidency. Most included comment about their enthusiasm for the President’s commitment to a clean/green/sustainable agenda in their messages.

Plant a tree pledge – We plant a tree on behalf of every client that invests in an ESG themed portfolio with us

If you have an interest in learning more and how to get started please contact us below.

Risk Warning Notice Trading in the products and services offered by MB Capital may, result in losses as well as profits as the value of investments may go down as well as up. You may not get back the full amount you have invested. Any reference to past performance should not be viewed as an indication of any future performance. Investments held in overseas markets are subject to the effects of changes in exchange rates which will impact on the value of the underlying investment. Investments made in AIM and penny shares carry an increased risk due to the difficulty in creating a market in these shares. There may be a substantial difference in the buy and sell price. Investing in a themed portfolio or with focus on a particular area or sector of the market can reduce diversification and increase the overall risk of your investment portfolio.

Disclaimer The materials contained herein are for information purposes only and do not constitute an offer to sell or a solicitation of an offer to purchase any interest in any investments offered by MB Capital Limited or its affiliates. MB Capital Limited is authorised and regulated by the Financial Conduct Authority (the ‘FCA’). The information contained herein is directed inside and outside the United Kingdom, and it is not directed at any persons in the United States or any other jurisdiction where it would be unlawful to access this information.

The investments and services to which this publication relates are only available to persons with a categorisation as either a retail or professional client or an eligible counterparty.

The performance information (including any expression of opinion or forecast) herein reflects the most-up-to date data at the time of production and publication made in good faith on the basis of publically available information or on sources believed by MB Capital Limited to be reliable, but not liable, guaranteed as to its accuracy or completeness for any such information. Returns are subject to change and may be amended. Past performance is not a reliable indicator of future performance.

Notwithstanding any statement herein, MB Capital Limited does not exclude or restrict any duty or liability that it has to its clients under the regulatory or legal system in the United Kingdom.

Plant a tree pledge – We plant a tree on behalf of every client that invests in an ESG themed portfolio with us.