Sinclair & Company advises institutional investors, including pension fund trustees, chief investment officers, portfolio managers, investment advisors, family wealth offices, investment analysts and investment marketers, that seek to integrate environmental, social, and governance factors [ESG] into investment decisions.
Sinclair & Company has developed models for integrating sustainability into the investment value chain for different types of investors. One of the fundamental maps is built upon six design elements. Our proprietary 6P model identifies the current architecture for integrating sustainability and/or ESG factors into the investment ideas, management and execution. The model provides a synopsis of the current architecture and a gap analysis, mapping the effort and timeframe to rolling out an ESG component to investment analysis and portfolio management. We have experience with this model in developing architecture across regions, developed & emerging markets, and across equity, fixed income, property, and alternative investments. At the cutting-edge of this new approach to investment as usual are efforts being made in emerging and frontier markets like Brazil, Botswana, Belize and Bulgaria.
We support investment practice by offering tailor-made advice on investment architecture and investment management. Where is investment practice today? Active asset owners [for example public pension funds] are exploring the boundaries. Pension funds have a business case for reducing negative and increasing positive externalities. CalPERS, the biggest U.S. pension fund, has identified the investment case for incorporating corporate governance, as firstly, shareholders are willing to pay a premium for well-governed companies, secondly, a "corporate governance premium" can be captured to increase shareholder value, and thirdly, well-governed companies have a competitive advantage in attracting capital. Institutional investors have linked superior investment performance with strong pension fund governance according to research by Oxford University and Watson Wyatt. In September 2007, a powerful group of investors and advocacy groups filed a petition with the U.S. Securities and Exchange Commission asking the SEC to require publicly traded companies to assess and disclose their financial risks from climate change. The Enhanced Analytics Initiative [EAI] launched in 2004 includes 30 institutional investors with US$ 3 trillion AUM committed to allocating 5% of their research budget to investment research adjudged to present the best coverage of environmental, social, and corporate governance [ESG] factors.
There is no "free lunch": investors must want to make a positive change in the world - or the sustainability theme must produce returns similar to other investment opportunities. Our process helps investors think through the challenges, then act to execute their strategy across their investment business.