"Faced with no improvement, they're left with no choice but to offload their assets."
In the modern business landscape, companies are increasingly adopting Environmental, Social, and Governance (ESG) strategies to foster long-term growth and resilience. One such fund leading the charge is the Pictet-Water Fund.
The Pictet-Water Fund, a thematic investment strategy with a focus on water quality, has been at the forefront of ESG integration. The fund identifies ESG factors that are most relevant to their investments, allowing for effective resource allocation and building stakeholder confidence in their strategic direction.
One of the key strategies of the Pictet-Water Fund is embedding ESG into their core business operations. Instead of treating ESG as a separate or compliance-only initiative, they integrate it into their operations, building resilience against political and market volatility, and creating sustainable competitive advantages.
Clear, precise ESG communication is another hallmark of the Pictet-Water Fund. They connect their ESG efforts to broader business goals with specific measurable targets, building credibility with investors, employees, and customers. Transparent data-driven communications are essential in establishing trust and fostering long-term relationships.
The Pictet-Water Fund also invests in clean technologies such as renewable energy and battery storage to meet corporate net-zero commitments and support energy transition. Aligning ESG strategy with culture and talent management is another priority, recognising that strong ESG performance attracts and retains employees, especially millennials, reduces turnover, and increases productivity.
Engaging in authentic ESG marketing and brand positioning is another strategy employed by the Pictet-Water Fund. They focus on shared values and tangible social and environmental outcomes, building trust with customers, employees, and investors in a values-driven market.
The Pictet-Water Fund's approach to ESG is not limited to environmental aspects. They also place great emphasis on social engagement, with an emphasis on employers acting as responsible employers with a long-term perspective. Governance is another crucial aspect, as good ecological and social practices can be implemented through governance.
The fund conducts thorough due diligence before investing to ensure their investments are likely to be long-term under most conditions. They are transparent about how ESG influences their investment process and philosophy, and clients understand the Water strategy well.
The Pictet-Water Fund's active, engaged approach has not gone unnoticed. Clients are increasingly interested in the fundamental impacts the fund can have as an active, engaged investor. They are asking more questions about the types of engagements the fund has undertaken, whether it's E, S, or G, in relation to controversies, corporate strategies, or Sustainable Development Goals (SDGs).
The fund's engagement with companies is not limited to one-off interactions. They monitor how things evolve, measure management's responsiveness to external factors and their input, engage with companies, vote against the board at shareholder meetings if necessary, write letters, and have conversations with the board.
The Pictet-Water Fund does not aim to end an engagement by completely exiting a position, but may sell if they see no change for the better and significant risk. For instance, they have been engaged for years with a large multinational corporation that operates concession models and sells industrial water products globally, advocating for changes in board oversight and the use of sustainability metrics in executive compensation.
As companies recognise the importance of ESG, more CEOs are taking concrete positions such as establishing a sustainability committee, appointing a Chief Sustainability Officer, or having a direct reporting line for ESG to the board. The Pictet-Water Fund's approach to ESG is a testament to the fact that companies are more responsive to feedback regarding ESG issues than they were in the past.
Moreover, the fund's philosophy and approach aligning with employees and shareholders can translate to other areas of the business through good governance. The management's philosophy and approach aligning with employees and shareholders can also translate to other areas of the business through good governance. The Pictet-Water Fund has aggressively voted against executive remuneration that benefits from temporary layoffs, demonstrating their commitment to fair and responsible practices.
In essence, the Pictet-Water Fund exemplifies a successful approach to ESG integration, creating long-term shareholder value and resilience by making ESG a strategic lens applied throughout the organization, communicating progress credibly, investing in sustainability innovations, and fostering an ESG-driven culture.
