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:

  • Riaa icons 10 Renewable energy and energy efficiency
  • Riaa icons 13 Sustainable transport
  • Investment2 More sustainable companies

It has some level of screening for:

  • Riaa icons 36 Armaments
  • Riaa icons 33 Fossil fuels
  • Riaa icons 35 Tobacco

It fully excludes:

    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: 
    • Efforts to transition towards renewable energy
    • Approach to minimising biodiversity loss and water use
    • Responsible supply chain management
    • Responsible and inclusive HR management
    • Building positive community relations
    • Whistleblowing policies 
    • Consumer data privacy
    • Responsible remuneration policies
    • Board independence
    • Functional governance committees 
    • Stakeholder engagement 
    • Responsible financial management 
    • Responsible reporting

    *RIAA has received written undertaking from product issuer to update ESG-criteria, assessed as part of certification, either at: 
    • Next roll of product collateral, Internal policy update and/or 
    • Next reporting/disclosure cycle
    https://blueoceans.com.au/wp-content/uploads/2021/08/04170-blueo-sustainabilitypolicy_a4-web-20210811.pdf
    Blue Oceans Fund Flyer Wholesale Aug 2021.pdf 1.13 MB
    Harbourside - Blue Oceans Investment Program_V2_ July 2021.pdf 960.61 KB

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