As the globe faces a range of sustainability challenges, there is an understandably growing awareness and interest within the community when it comes to the alignment of personal values or beliefs with one’s own investments.

These global challenges include but are not limited to; resource scarcity, population pressure, social disparity, land and water degradation; the list goes on.  Various industries will face change as a matter of necessity and once more expensive sustainable pathways are approaching a tipping point from a scale and cost perspective.  At this point Ethical style investment and sustainability themes become very much linked.

As discussed at our recent Briefing at the NGV in August, the landscape in this investment space has evolved rapidly in recent years with many styles and structures available and widely marketed.  While this is of course a positive, navigating and making sense of the options can be challenging.

APC recognises that these themes will be of primary importance to some of our clients.  Ensuring we can talk to you about how these concepts translate through various investment types will be important, as well as being in a position to put potential options forward where there is an interest.


What have we considered?

A core component of APCs investment philosophy is that diversification is essential.  In considering various sustainability-focussed investments, it was important to ensure that this and other key tenets are not “traded-off” in the pursuit of another outcome.  This meant looking to managed funds who invest in a broad number of underlying companies and sectors.

The definition of what is sustainable or ethical can be interpreted quite broadly at the investment level.   It can for example mean a particular focus on the efficient use of resources, lowering average carbon emissions across the portfolio, the delivery of essential goods and services, more effective waste management and so on.  It may also mean excluding particular companies or sectors for negative behaviours (think sectors like weaponry production, tobacco, gaming, big polluters, etc) and focussing on those companies or sectors whose activities and practices it is believed will ultimately replace existing unsustainable practices and are contributing positively in some way.

We considered investment managers who – together with having a strong track record and investment fundamentals – integrated “ESG” factors into their stock selection and investment process.  That is Environmental, Social and Governance.


Examples of the ESG factors





How can these themes be incorporated into portfolios?

We have developed a sustainability investment focussed ‘pod’ which can be incorporated into or alongside the existing Classic Portfolio approach.  This group of managed funds are global equities based.  The pod seeks to blend differing styles and approaches to sustainability and portfolio construction thereby delivering what we believe to be an acceptable level of diversification.

APC commits to ongoing investment consideration, so will continually look at what is available and what might assist our clients to best meet their individual objectives.   That may also mean looking beyond the global equity space specifically in time.


Where to from here

APCs investment philosophy remains unchanged, that is that discipline is rewarded and practicing smart diversification is essential.  A portfolio can however be tilted to better align with certain values without necessarily taking on undue investment risk.

The incorporation of these investments will be very much individual so if there is an interest or you would simply like to know more, please talk to us at your Regular Planning Meeting.