Sustainability specialist Calvert Investments has announced a new strategy for using resource efficiency to identify investment opportunities in large-cap firms.
The US company, which has over $13 billion of assets under management, has teamed up with Osmosis, a UK-based investment management firm focusing on resource constraint, consumption and the environment in financial markets to devise the system.
The strategy, known as Calvert-Osmosis MoRE, analyses energy consumption by measuring water and energy usage and waste production across comparable companies, to help assess their long-term viability as investments.
Stocks are selected based on the relationship between resource efficiency and revenue, using a "best of breed" approach.
Osmosis Investment director Saad Rashid said: "We believe we have found an objective way to demonstrate that a company's ability to create greater value from resource inputs correlates to that company's ability to generate better shareholder returns. The strategy seeks to capture uncorrelated alpha through determining how much the market has fully priced in this resource efficiency advantage."
The strategy will initially be available on Bank of America Merrill Lynch's platform.
Sophie Robinson-Tillett