Investment screens are a method to narrow the investment portfolio based on traits of the companies or securities available for investment. What does this mean in practice, and how does this work at Pathstone? This note will explain how Pathstone helps clients customize the design of their portfolios, from foundation (data), to building materials (methodology), to blueprint and execution (client preferences and Pathstone oversight), to ongoing maintenance.

New York’s Climate Week, held annually and timed with the UN General Assembly sessions, transforms Manhattan into a massive meeting place of the minds.  It draws climate experts, policymakers, corporates, advocacy groups, investors, and others to share collective insights, opportunities, challenges, and threats to the business community, society, and our planet.

This year’s gathering was marked once again by a whirlwind of discussions. Key events were hosted by The Climate Group, the Clinton Global Initiative (CGI), Concordia, and dozens of others, including the Climate IQ Conference and sessions with Ceres and As You Sow.

Having attended several of this year’s premier events, we offer our take on key themes, as well as highlights from some of the more compelling discussions. For investors who are firm believers in (or curious about) regenerative and inclusive capitalism as a force for addressing our toughest global challenges, we’ve also included links to resources that may be of interest, including reports from several sustainability and climate-focused asset managers on Pathstone’s investment platform.

The healthcare sector is one of the largest and fastest-growing in the world. Healthcare is the second largest sector in the global equity markets (MSCI World) behind information technology, representing 13% of the global market capitalization.    Within the MSCI World Healthcare index, there are 10 industry sub-groups representing 153 companies. For the five years leading into the pandemic, the  S&P 1500 healthcare sector profits experienced compound annual growth 3.5 times greater than the full S&P 1500.

On behalf of Pathstone’s Executive Leadership Team and Impact Committee, I am delighted to share the Pathstone Impact Report. This report reflects Pathstone’s efforts to create value for our clients, our people, and our communities during a period of tremendous upheaval in our world.  This same period has been a time of much positive change and growth at Pathstone as we continue to evolve with a focus on perfecting the experience of both our clients and team members. The Pathstone Impact Report, which covers the 2021-22 period, offers a window into our efforts to integrate our core focus on innovative client service, valuing our people, and serving our communities into all we do as a firm. Please see PDF for the full report.

The transition to clean energy represent one of the most significant global imperatives today. Meanwhile, our ongoing need for fossil fuels is undeniable. How should we think about the role of fossil fuels in this transition? How can we achieve a “just transition”?

And, as investors, can we combine progress with pragmatism?

These are a few of the overarching questions tackled in Pathstone’s recent webinar, Investing in the Energy Transition. Pathstone’s Erika Karp hosted a conversation with leading experts Mark Brownstein, Senior Vice President of Energy Transition at the Environmental Defense Fund, Geoff Eisenberg, Partner at the Ecosystem Integrity Fund, and Brooks Preston, Managing Director at the Macquarie Group, to explore this complex topic.

To watch a replay of this conversation, click here.

The “creative economy” is a multi-billion dollar economic sector that can drive innovation, job creation and, investment opportunities. But what is it? And what are the investment opportunities?

Pathstone recently explored this topic with Laura Callanan, a founding partner of Upstart Co-Lab. Since its 2016 launch, Upstart Co-Lab has connected investment capital with creative people and businesses. It has also raised the profile of the important role played by the creative economy in community development as well as economic empowerment for creative entrepreneurs.

• Despite evidence, a myth persists that sustainable and impact investment strategies financially underperform conventional strategies. This report is intended to address that myth, clarify the purpose and use of environmental, social, and governance (ESG) analysis, and highlight key sustainable investment approaches and issues.
• ESG analysis seeks to identify and evaluate material environmental and social considerations that may influence long-term investment performance. “Materiality” implies that an ESG factor is reasonably likely to impact the financial condition or operating performance of a company. The analysis looks to see whether the relevant governance structures within asset managers, strategies, and underlying investments are equipped and motivated to govern effectively. The evidence shows that ESG analysis enhances the predictive insight provided by fundamental financial analysis.
• Sampling from more than 1,200 studies in the past two decades, including 80 reports published in the past three years alone, our assessment supports the conclusion that managers deploying ESG analysis to construct portfolios can achieve competitive returns while meeting the requirements of fiduciary duty. Some would argue it is an essential element of fiduciary duty.
• In this report, we address myths that have persisted despite the academic studies. We also seek to describe the consensus view among the studies identified in our bibliography. We lay out the rationale for ESG integration by investment analysts and by corporations in their respective business practices, and where possible we provide insight into the relevance of specific research for investment decisions.
• Lastly, we highlight the discipline used at Pathstone to evaluate investment managers who integrate ESG considerations into their research process. It is a critical endeavor to select strategies where the skill of the manager can offset the potential risks to portfolio construction when applying an ESG lens.

Please see PDF for full report.