Blue Oceans Capital Wholesale Strategy

Product Name	Blue Oceans Capital Wholesale Strategy
Issuer	Blue Oceans Capital
Category	Investment
Type	Other (please specify)
Target	Wholesale
Certified Since	2021

Asset Classes	International equities
Markets	Australia
Investment Approaches	Negative Screening, Positive Screening
It Includes:	Renewable energy and energy efficiency Sustainable transport More sustainable companies
It has some level of screening for:	Armaments Fossil fuels Tobacco
It fully excludes:
Broker	Responsible Returns
URL	https://www.responsiblereturns.com.au/investment-options/blue-oceans-capital-wholesale-strategy/profile

Overview

The Blue Oceans Capital Wholesale Strategy targets companies with rapidly growing revenues and scalable-business-models, that have high performance across sustainability and ESG. We recognise that the transition to a more sustainable economy is a global mega-trend that is creating opportunities for companies delivering positive-disruption.

Description

The strategy uses a proprietary research and analysis process that applies both negative and positive screens to identify companies best positioned to benefit from the sustainability transition. We apply thresholds relating to carbon intensity and exposure to controversial industries, while ensuring the portfolio is inline with the Paris Agreements target of keeping global temperature increases below 1.5°C.

We also assess a range of environmental, social and governance (ESG) factors to give us a complete picture of the risks and opportunities surrounding a company. The bottom-up process involves a proprietary qualitative assessment of the company's approach to a broad range of ESG issues. It helps to inform our decision-making process across the phases of screening, stock selection and portfolio construction.

We first narrow a large field of investable companies by applying negative screens; we won’t invest in companies involved in the following industries:

Fossil fuels (Mining, production and intensive usage)
Animal Cruelty
Ocean Exploitation
Deforestation
Alcohol and Gambling
Any media harmful to psychological well-being
Tobacco
Controversial weapons.

We also won’t invest in companies with material indirect exposure to these industries, which includes companies that provide services, transport, packaging or financing to the sectors. (Our materiality threshold for indirect exposure is 5% of revenue).

The strategy targets low-emissions companies. In terms of energy usage, we apply a fossil-fuel exposure threshold of 3%. This ensures we only invest in companies whose spending on fossil fuels, across the value chain, is less than 3% of total revenues.

NB: as of June 2021 the ‘fossil-fuel exposure’ of the Blue Oceans portfolio is far below 3%, in fact, data from Sustainable Platform suggests it is negligible and counted as 0%.

This recognises the investment risks of material exposures to carbon emissions, whether it be through production or usage of fossil fuels. While also recognising the environmental and social imperative of keeping global temperatures rises below 1.5 degrees, as recommended by the UN Paris Agreement.

We ensure our portfolio remains aligned with the Paris Agreement target by screening-out any companies whose exposure to fossil-fuels is above the 1.5 degrees threshold.

We also assess a range of environmental, social and governance (ESG) factors to give us a complete picture of the risks and opportunities surrounding a company. It helps to inform our decision-making process across the phases of screening, stock selection and portfolio construction.

The bottom-up process involves a proprietary qualitative assessment of the companies approach to a broad range of ESG issues, including: