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Amplified: weaving the SDGs into investment processes

The UN Sustainable Development Goals (SDGs) are a universal set of goals, targets and indicators for global development. They have been called a blueprint for changing the world – but how? By ending global poverty, safeguarding the planet and aiming for prosperity for all – all by 2030.

In this episode of Amplified, Aoifinn Devitt, Head of Investment – Ireland, is joined by Mitch Reznick, Head of Research and Sustainable Fixed Income, and Hamish Galpin, Head of the SDG Engagement Equity Fund, to delve into the SDGs, in particular looking at how we can weave them into investing.

Hamish says: “The concept of using the SDGs is all about long-term shareholder value creation...sustainability has gone from being something companies ought to consider to something companies really need to consider.”

While Mitch says: “The engagement process and what we try to achieve is for companies to affect positive change in society and the environment which we believe over time will be self-reinforcing for the financial strength of that company.”

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Featured Insights

Techtronic: Drilling deep into the supply chain
Company overview Techtronic Industries is one of a number of consumer discretionary or industrial manufacturing companies within our portfolio. We consider these companies to be, from an engagement perspective, ideal investments as each has multiple touch points with different SDGs. Techtronic is a Hong-Kong listed company focused on the US consumer market, with predominantly Chinese manufacturing operations for its power tools and floor-care products, principally sold under its Milwaukee brand. •Market capitalisation: $10bn •Leadership: Joseph Galli Jr, CEO; Horst Julius Pudwill, Chair •Operational scope: Hong Kong-listed with a majority Asia-based workforce, but principally a US sales market. Investment case The attraction of the stock is its exemplary innovation record, which has resulted in it rapidly taking market share in the industry verticals it has chosen to target. This was evident to us in a recent visit to the global R&D centre of Milwaukee – one of the most impressive company visits that Hamish Galpin, Lead Manager of the Fund, has undertaken in his 29 years as a professional stock picker. From a financial perspective, if the company delivers on its aims of releasing innovative products, achieving further increases in market share and expanding into new markets, it should sustain a strong growth profile for a number of years to come. The stock has a similar margin and return profile to its larger and better-known competitor, Stanley Black and Decker, and we believe its slightly higher return on equity and price-to-earnings ratio are justified by the track record and quality of the business.