Focus on economics and environment
Environmental footprint can be approximated in an objective and structured way. The reshuffling of the global supply chain presents ESG investment and engagement opportunities.
Watch out for greenwashing
Company disclosure or third-party ratings does not provide a full picture. For example, an easy way to maintain high profitability and keep pollution low on the book is to step up outsourcing to Asia.
Look for less obvious opportunities
Food, forestry and fast fashion are straightforward and well covered. Mainstream reporting frameworks focus on primary industries and traditional secondary industries (e.g., cement). These “low hanging fruits” have largely been taken. Untapped ESG opportunities are hidden in deep verticals not easy to understand.
Keep up with the times
Smart devices and electric vehicles have reshaped our world. As in-sourcing and re-industralization in strategic sectors are arising in developed economies, the environmental impact will also return from Asia to Japan/UK/EU/US.
Return to the Basics
Getting the the basics right provides clarity The knowledge of technology, pricing and cost structure helps in the understanding of the environmental footprint in the manufacturing process and the circular economy (often the lack of it). In real life, recycling happens only when it is technologically and economically viable.
Chemistry & products
How the specialty chemicals are engineered for what purposes and which products.
$$$ and intellectual properties
Patents may not be valued much on the book but they usually give pricing power. Fair trade matters.
Manufacturing & recycling
The recycling of scrap by electronic component manufacturers should be part of the equation.