Douglass Winthrop

Investment Thesis

Environmental issues capture an ever larger share of mind for citizens, policy makers and investors. Debates over renewable energy, ocean degradation, deforestation and related issues are intensifying as the world wrestles with a warming climate and the need to provide food security and fresh water to a rising global population. Reflecting the growing visibility of environmental issues, nearly 200 countries committed to policies aimed at lowering the rise in world atmospheric temperatures at the 2015 Paris Conference on Climate Change.

We believe private capital, more than foreign aid or government regulation, will drive a wave of innovative solutions to environmental challenges in the years ahead. Indeed, we believe companies that adopt sustainable policies will have competitive advantages that will translate into faster growth, higher profitability, better employee retention and wider economic moats. Accordingly, we are pleased to announce the Douglass Winthrop Environment Strategy for clients who seek exposure to companies we believe will prosper as the global economy confronts and adapts to a range of environmental concerns.

Investment Strategy

Environment Strategy portfolios will invest in the common stocks of companies that (1) are adopting sustainable practices – e.g., reducing carbon consumption, enhancing water conservation, improving energy efficiency, using sustainable materials – in operations, finance and marketing or (2) are providing products or services that directly address an environmental problem.

In addition to a rigorous environment screen, all potential investments will be screened for financial and competitive factors similar to those employed for core DWA portfolios. We will invest in wide moat, shareholder oriented companies with strong balance sheets, rising free cash flow yields and reinvestment opportunities.

Our strategy is to find profitable investments leveraged to environmental factors. We believe companies that are ahead of the curve on environmental issues, both in their internal practices and in the products and services they sell, will stay ahead of their competition, build a wider defensive moat around their businesses, attract the best young talent and will be better prepared for the future than average companies. Douglass Winthrop Environment Strategy, therefore should not be considered a typical socially responsible investment vehicle. Our goal is to select companies for investment that we believe are likely to outperform the market by enhancing our stringent investment criteria with an additional environmental screen.

  • Environmental Filters:
    • Engaged and Accountable Leadership
    • Transparent Assessment of Environmental Opportunities and Risks
    • Relevant Environmental Performance Indicators and Goals
    • Materiality of Environmental Strategy to Long-Term Value Creation
    • External Assurance of Consistency with Evolving Best Practices