Etho Capital and Future Super to Launch Australia's First Global Sustainability Index
Establish Partnership To Develop Additional Sustainable Investment Strategies
New York, NY, September 29, 2016 (Newswire.com) - Etho Capital, the investment company committed to creating world-class, data-driven investment solutions that advance sustainable priorities and provide superior risk-adjusted returns, and Future Super, Australia’s first fossil fuel-free superannuation fund, today announced an agreement to launch a global sustainability index. Etho Capital will create the Global Sustainability Leadership Index composed of 100 of the world’s most sustainable and efficient companies that are leaders in their sectors. The Global Sustainability Leadership Index will exclude companies closely linked to the extraction, processing and distribution of fossil fuels.
Since its launch in September 2014, Future Super has helped shift over AU $185 millions away from fossil fuel exposed super funds. Future Super investors will initially commit AU $35 million to the Global Sustainability Leadership Index, which is expected to begin trading at the end of October 2016.
The announcement coincides with an increased demand among institutional investors in Australia and around the world for investment products that have the potential to produce higher returns by investing in companies with the most efficient supply chains and reducing exposure to companies with poor sustainability track records. The Global Sustainability Leadership Index is designed to achieve superior risk-adjusted returns while meeting the sustainability needs of the Australian marketplace. The Index will utilize Etho Capital’s proprietary Smart Sustainability Process™ analytics, which applies the most rigorous sustainability screening standards focusing on supply chain efficiency, governance and business practices of a broadly diversified universe of nearly 6000 companies.
“We are proud to partner with Future Super and form what we believe is a groundbreaking relationship to create a suite of actively and passively managed investment products, starting with the Global Sustainability Leadership Index,” said Conor Platt, Co-Founder, Chief Executive Officer and Chief Investment Officer of Etho Capital. "Future Super and Etho Capital are acting on what many investors are beginning to realize: sustainability can substantially impact investment performance, and is therefore a core component of fiduciary duty. There’s a price on climate pollution, poor governance and poor business practices, generally, and the more a business is connected to this supply chain, the more it is going to hurt their performance.”
Etho Capital’s research shows that companies with a more efficient supply chain and better governance drive alpha, and are a proxy for better performance in the markets over time.
“Our objective is to provide our investors with Australia’s first highly customized fossil fuel free index composed of some of the world’s top performing and sustainable global companies to meet the performance and sustainability criteria of the Australian marketplace,” said Simon Sheikh, Managing Director, Future Super. “Etho Capital is really the only investment company today that brings the proven track record and the depth of analysis we need. We are excited to partner with Etho Capital on this Global Sustainability Leadership Index and look forward to working together to create other sustainable investment solutions for our fund.”
Last November, Etho Capital launched the ETHO ETF (NYSEArca: ETHO), the first index ETF to exclude all fossil fuel companies and the first public investment product to select equities based on climate efficiency while rigorously screening for overall sustainability and social responsibility. This marked the first U.S. equity product to employ Etho Capital’s Smart Sustainability Process™, and the new collaboration with Future Super is an important step in the company’s plans to bring sustainable investing to global scale.
“Global investors are realizing that sustainability and supply chain efficiency metrics can be very material for financial risks and returns, particularly when connected to economy-wide shifts towards climate pollution regulations and disruptive technology trends, like the potentially rapid transition from oil to electrified transportation," said Ian Monroe, Co-Founder, President and Chief Sustainability Officer of Etho Capital, who also teaches at Stanford University. “Our approach has shown that investors of all sizes can align their portfolios with their values without sacrificing returns. Our Global Sustainability Leadership Index relies on our proven Smart Sustainability Process and it’s designed to provide Australian investors with an innovative solution that achieves top-tier returns while meeting all common sustainability requirements.”
The parties also agreed to develop additional actively managed products that demand high performing sustainability investment products. Etho Capital intends to expand its suite of actively and passively managed investment products with additional strategic partners as it expands its offering in global markets. Etho Capital expects to launch its first actively managed long/short hedge fund this fall.
Future Super is Australia's first fossil fuel free superannuation fund. Future Super's investment strategy is to select companies that provide competitive financial returns and have a positive impact on the environment and society. This includes avoiding all companies directly involved in coal, oil and gas, as well as companies that provide support to the fossil fuel industry. Future Super believes that we can't prevent climate change if we continue to invest in it. Since its launch in September 2014, Future Super has helped shift over $185 million away from fossil fuel exposed super funds. To find out more visit www.myfuturesuper.com.au.
Etho Capital is a mission-driven investment company committed to creating world-class, data-driven investment solutions that advance sustainable priorities while providing superior risk-adjusted returns. Etho Capital’s proven Smart Sustainability Process™ utilizes both quantitative pollution and efficiency data and qualitative expertise methods to generate broadly diversified portfolios of only the most carbon-efficient and sustainable companies. Etho Capital launched its first index ETF in November 2015 (NYSEArca: ETHO), which is also the first index ETF to exclude all fossil fuel companies, and the first public investment product to select equities based on climate efficiency while rigorously screening for overall sustainability and social responsibility.
Source: Etho Capital and Future Super