EDM maintains a socially responsible investment approach in an effort to make the best investment decisions. Our goal through this commitment is to combine elevated long-term returns with a positive impact on society.
EDM reaffirms this conviction with the launch of our new EDM Global Equity Impact Fund, the objective of which is sustainable investment. The fund is consistent with the United Nations Sustainable Development Goals (SDGs).
This global equity investment vehicle groups together a selection of securities that meet certain strict criteria. The EDM Global Equity Impact Fund is classified as Article 8 Plus under the EU’s Sustainable Finance Disclosure Regulation (SFDR) and aims to actively promote environmental and/or social causes.
Within this framework, the companies in which the EDM Global Equity Impact Fund invests are classified according to their objectives in the different ESG categories, such as the EU’s green taxonomy, the circular economy, the energy transition toward a low-carbon economy, gender equality, decent employment, and economic growth.
Companies must be aligned with the objectives of the Paris Agreement, which establishes the legal framework to combat climate change. This is measured by carbon intensity—the amount of a company’s CO2 emissions per million euros of sales—and is compared to the weighted average carbon intensity benchmark index (MSCI ACWI), which determines a given company’s relative effect on the climate.
The purpose of the fund is to reduce the intensity of CO2 emissions and we populate the portfolio with companies that provide solutions to the climate challenge.
From a social perspective, the fund invests in those companies that promote gender diversity among employees and senior management positions, with active internal policies and clearly defined goals. Social-impact investment seeks to promote solutions that improve society and the sustainability of the planet’s resources.
The Fund excludes investment in certain sectors, such as the manufacture of controversial weaponry (anti-personnel), gambling, and adult entertainment (pornography). In addition, an important part of the portfolio invests in securities considered ‘best-in-class’ in each category. These are companies that lead their sectors in terms of compliance with environmental, social, and corporate governance criteria.
At EDM we have our own internal ESG risk analysis procedure, which includes active meetings with company management teams. We are confident that sustainable business models are more successful in the long term, and as such, ESG considerations are an essential component in our investment process.
The Fund consists exclusively of companies that lead their sectors, which have competitive advantages, healthy balance sheets, strong cash flow, successful management teams, and that meet our strict sustainability criteria. Upon launch, the portfolio will trade at a very attractive 2023 P/E ratio of 19.5x, with estimated annual profit growth over the next five years of +15%. We are confident that the application of our ESG selection criteria will add value to the fund’s profitability and meet the expectations of a sustainable long-term investment.
Mariona Selva,
Portfolio Manager
