On the corporate side, some companies do apply best practices. Sycomore AM’s proprietary fundamental analysis model, SPICE, enables our portfolio managers to consider all extra-financial factors specific to the sector when making investment decisions.
To assess the environmental impact of companies operating within the metals and minerals sector, we use the NEC – a multidimensional indicator measuring the extent to which a given activity contributes to the environmental transition. Applicable to all occupations and all asset classes, the NEC ranges between – 100% and + 100%; it covers climate change, but also biodiversity, including water usage and pollution, and resources, such as the management of waste.
Investment solutions supporting a sustainable transition for resources
The stock selection process applied to our Environment funds, Sycomore Europe Eco Solutions and Sycomore Global Eco Solutions, requires investee companies to display NECs Stricky above zero (i.e, a clear positive contribution to the environmental and energy transition, according to 8 environment-based subthemes).
These criteria naturally apply to companies operating within the metal and minerals industry, to ensure we only select players fostering an economy that is both carbon frugal and respectful of natural capital. Importantly, we see to ensure that the companies producing the metals instrumental to the transition have established a roadmap for reducing their impact, notably in terms of GHG emissions and pollution.
By applying our analysis model, we also pay particular attention to human rights and the quality of business relations with providers of raw materials.