The fast view
- Companies are increasingly being held to account for their impacts on society and the environment, influencing their growth and profitability.
- Investors need new tools to evaluate these impacts, or ‘externalities’, and hence identify opportunities and risks that the market may have mispriced.
- The Sustainable Equity team has developed a Capitals Framework to assess a wide range of externalities. The framework is an intrinsic component of the investment processes of all the team’s sustainable strategies.
- We assess different categories of externalities. This paper introduces the framework we use to do this and then focuses on how we analyse natural capital externalities.
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