Climate in the cross hairs with new ESG longshort strategy
Impact Cubed’s global equity long-short strategy seeks alpha in climate short positions
London, December 16, 2021- Impact Cubed, a leading provider of ESG data and investment solutions, has launched its Impact Alpha strategy, a market neutral equity long-short strategy that aims to deliver an absolute return while targeting ESG themes and climate solutions.
Impact Cubed’s strategy creates new alpha opportunities by going short on “brown” and long on “green”. The strategy takes long positions in companies with positive ESG and impact factors, while shorting those with negative ESG factors, such as high carbon emissions or low board diversity. Climate related themes in the strategy include climate solution providers or sustainable food and agriculture solutions that reduce carbon emissions. Impact Cubed’s award winning ESG and impact data is used to uncover potential equities for investment and quantify the impact of the overall strategy.
“Our in-house ESG data gives the investment team an edge, but we also take a fundamentally different approach from other ESG or climate strategies,” said Larry Abele, Chief Investment Officer at Impact Cubed. “We draw on decades of ESG long short experience to create smarter themes that go beyond the very common – and overplayed – strategies focused on ESG scores or renewable energy.”
Alongside the launch of the strategy, Impact Cubed has also published the world’s first quantitative portfolio impact report for an alternative equity long-short strategy. The report quantifies 15 ESG and impact factors for both long and short positions in the strategy. The strategy has net negative financed carbon emissions, which helps investors that want to reduce their overall financed carbon emissions and avoid financially material climate risks in their portfolios.
The launch comes at a time when a growing number of investors world-wide are scrutinizing ESG considerations in their portfolios. Long-short equity strategies that avoid ESG risks while delivering positive climate solutions resonate with family offices and wealth managers, whose clients want to maintain a diverse and liquid portfolio with above market returns.
About Impact Cubed: Impact Cubed provides analytics and investment solutions for building more sustainable portfolios with greater impact. It combines an award-winning approach to integrating impact into risk and return with technology-enhanced portfolio design and management. The outcome is a seamless approach to customized sustainable investing.