Nanuk is committed to investing sustainably and managing responsibly.

Nanuk’s commitment is inherent in the firm’s values, beliefs and in its clearly defined focus on investing in industries that are contributing to greater global environmental sustainability and resource efficiency.

This document sets out Nanuk’s approach to responsible and sustainable investment, and explains the manner in which environmental, social and governance (ESG) factors are integrated into the firm’s approach and investment process.  There is a lot of jargon that has proliferated in this area that Nanuk strives to avoid, while maintaining a clear, logical and pragmatic attitude to what is still an embryonic yet very important issue.


Nanuk Asset Management was formed in 2009 to develop world-class investment expertise in the areas of environmental sustainability and resource use efficiency and to assist its clients address the related opportunities and risks. 

Since its formation, Nanuk has been dedicated to investing sustainably and managing responsibly on behalf of its clients. This dedication is driven by two priorities, (i) the firm’s fiduciary responsibility to act in the long-term best interests of its clients and (ii) the firm’s purposeful investment in industries that contribute towards greater global environmental sustainability and improved resource use efficiency.

Nanuk’s commitment to managing responsibly is grounded in the firm’s Statement of Values which emphasizes the cultural and business principles by which the firm stands.

Statement of Values

  • Trust and Integrity are the foundation of all of our actions.
  • Responsibility is first and foremost to our clients who have entrusted us with their capital, and also in positively contributing towards a more sustainable world for future generations.
  • Transparency and Clarity are central to our relationships with our clients and the way we work within our firm.
  • Open-mindedness and Independence of thought, combined with analytical rigor, are critical in developing and applying our investment insights.
  • Respect for others and Diversity of opinion allow us to challenge and sharpen our perspective, helping us to make the best decisions and achieve the best outcomes.
  • Collaboration and Teamwork are central to how our investment ideas are formed and translated into investment actions.
  • Our Passion for investing and our pursuit of Excellence compel us towards the achievement of long-term investment success for our clients.

Beliefs & Focus

The firm’s core belief is that resource constraints and environmental challenges like climate change, pollution and water scarcity necessitate significant changes to business practices globally and that these changes will introduce many investment opportunities and risks in the coming decade and beyond.

Nanuk’s focus is global and the firm invests in companies having a material proportion of their activities in industries that are contributing to or benefiting from the global transition to greater environmental sustainability and resource efficiency.  

Nanuk believes that successful investment in these areas is critical in facilitating the global transition, through improving the efficiency of capital allocation and facilitating better long-term decision-making through broad engagement with stakeholders, including policy makers, corporate leaders and the public.

Nanuk considers environmental sustainability in a holistic and global context, investing in companies that are contributing positively at an extrinsic level.  Put another way, Nanuk invests in companies whose activities and business practices will supplant existing unsustainable practices.

Nanuk specifically excludes companies that contravene accepted norms for environmental stewardship, however it is acknowledged that investing in companies with low environmental footprints (eg banks) does not necessarily mean that they contribute to improving global sustainability at a holistic level (eg electric vehicles).  As such, the firm’s investment approach does not specifically target investment in companies having intrinsically low environmental impact in their own right.  To be clear, materiality of contribution to environmental sustainability and resource efficiency lies at the core of Nanuk’s investment approach.           

Positive Screening

Positive screening associated with Environmental (E) factors is intrinsic to the firm’s investment focus.  Nanuk’s investment universe is defined around 8 broad sectors, selected because of:

  • their contribution to achieving greater global environmental sustainability and resource efficiency, and
  • their inherent characteristics (eg growth, complexity, disruption), which provides a rich and attractive opportunity set for the extraction of excess investment returns. 

To be included in the investable universe and portfolio, companies must derive at least 25% of their value from activities within these sectors, ensuring that each investee company makes a material contribution to improving global environmental sustainability and resource efficiency.

The 8 broad sectors making up the investment universe are:

  1. Clean Energy
  2. Energy Efficiency
  3. Industrial Efficiency
  4. Waste & Pollution
  5. Food & Agriculture
  6. Advanced & Sustainable Materials
  7. Water
  8. Healthcare Technology

Examples of Nanuk’s sub-sector classifications are outlined below:

  • Clean Energy  –   Biofuel, Hydro, Natural Gas, Solar, Storage, Wind, ..
  • Energy Efficiency  –   Aerospace, Automotive, Building, Electrical, Sustainable Housing, ..
  • Industrial Efficiency  –   Industrial Automation, Internet of Things, Transport, ..
  • Waste & Pollution  –   Environmental Services, Packaging, Pollution Control, Recycling, ..

Negative Screening

Nanuk’s focus naturally precludes investment in many industries that do not align with the firm’s values and sustainability focus and whose practices are known to contravene social and ethical norms.  The firm recognizes that companies whose activities are contributing to greater global environmental sustainability and resource efficiency may also be involved in contentious areas, either directly or as suppliers of products and/or services.

Nanuk’s Exclusions Framework, outlined below, seeks to reduce risks associated with investment in companies whose practices contravene social and ethical norms. Factors such as contingent liabilities are considered as part of Nanuk’s conventional fundamental analysis.

Company exclusions are formalized around three main areas:

  1. Climate Change & Environment
  2. Weapons
  3. Ethical Values and Human Rights 

The Exclusion Framework is constructed in a pragmatic manner to permit investment in the following circumstances:

  1. where a company has indirect involvement in contentious areas, but is making a positive contribution to improving global sustainability and efficiency, and
  2. where a company’s involvement in, or transition towards, sustainable technologies and practices outweighs limited involvement in contentious areas and/or activities 

Nanuk does not invest in companies with a material proportion of their primary business activities in the following areas.

  • Coal & Coal-Based Energy, Oil & Gas exploration and Oil-Based energy, Uranium Mining
  • Nuclear Weapons, Anti-Personnel Landmines & Cluster Munitions, Military Contracting & Equipment, Weapons & Small Arms
  • Tobacco, Alcohol, Gambling, Adult Entertainment

Nanuk does not invest in companies whose business practices are known to contravene the following international norms:

  • Human Rights
  • Labour Standards
  • Anti-Corruption
  • Severe Environmental Damage In addition to general social and ethical considerations, Nanuk believes that such activities and practices present unacceptable longer-term investment risks.  A summary of sector, ethical and norms-based exclusion criteria and their respective revenue threshold criteria is provided in the table below.

Nanuk excluded over 1,600 companies from investment as at September 2017.  All company exclusions were assessed in the context of materiality and contribution to environmental sustainability and resource use efficiency.  A high-level summary of company exclusions is provided in the schematic below. 

Investment Approach

Nanuk employs an active fundamental investment approach aimed at identifying companies that have been mispriced by the market relative to their intrinsic valuation. The primary focus of Nanuk’s investment process is the assessment of valuation (leading to valuation-based price targets) and risk.  Nanuk believes that environmental, social and governance factors are important considerations in assessing both valuation (through impact on forecast cash flows and discount rates) and risk.

Nanuk believes there is a strong link between corporate governance practices and long-term shareholder value creation.  Factors shown to be linked to longer term performance, and factors that separately or in combination with other factors might indicate higher risks, are specifically considered in company analysis and at a portfolio level.

Sustainable, Responsible and SRI Investment

Sustainable, Responsible and SRI (Sustainable, Responsible, Impact) investing are terms used interchangeably to describe a broad range of investment strategies that variously involve the integration of environmental, social and governance considerations into investment processes and decision-making. These strategies are typically aimed at either improving risk and return outcomes, or achieving positive societal and environmental outcomes, or a mixture of both.

There are a number of discrete investment approaches that are typically applied, often in combination, within broadly defined “sustainable” investment strategies.  The Global Sustainability Investment Alliance (GSIA) identifies the following key approaches:

  1. Integration of environmental, social and governance (ESG) factors into the investment analysis and decision-making process
  2. Screening
    1. Positive screening
    2. Best in Class screening
    3. Negative / Exclusionary screening
    4. Norms-based screening
  3. Corporate engagement, active ownership, proxy voting
  4. Sustainably themed investing
  5. Impact investing

Nanuk recognizes that sustainable or responsible investment strategies can be either:

  • “broad”, ie involving the integration of E, S and G considerations within conventional investment frameworks, or
  • “core”, ie involving more focused strategies that seek to achieve a combination of financial and non-financial outcomes, typically also incorporating E, S and G integration. 

The majority of sustainably or responsibly managed assets are managed under “broad” strategies. 

“Core” strategies, often described as socially responsible (also referred to as “SRI”), ethical, socially conscious or “green” investment strategies, seek to generate both a sound financial risk adjusted financial return and social “good” such as social or environmental change.

Nanuk’s approach is that of a “core” sustainable investment strategy, one which is sustainably-themed and which utilizes both positive and negative screening and which integrates ESG factors into the decision-making process. 

Nanuk’s adoption of, and incorporation of the various approaches outlined above is summarized below.

ESG Scoring

Nanuk seeks to integrate E, S and G factors in a pragmatic way, aligned with the achievement of client risk and  return objectives.  This is done in a way that is consistent with the firm’s core values and beliefs, and is focused on holistic global sustainability and the extrinsic contribution made by the companies comprising Nanuk’s investment universe.

Nanuk integrates ESG factors into its decision-making process but does not optimize its portfolio on the basis of individual company or portfolio ranking or scoring assigned to various ESG metrics.  Nanuk’s approach, which is focused holistically on the materiality of contribution to greater global environmental sustainability and resource efficiency is illustrated in the following examples:        

  • Nanuk does not typically invest in companies in the Finance sector, where ESG scores are typically high (due to for example low carbon footprint), unless those companies’ activities are specifically related to Nanuk’s (above mentioned) 8 broad sectors associated with environmental sustainability and resource efficiency.
  • Nanuk does invest in companies involved in the shift from internal combustion engines to electric vehicles, a transition that is critically important to longer-term environmental sustainability.  Such companies include those that manufacture electric drivetrains and components, as well as those that manufacture lithium-ion batteries and related materials.  Companies mining and processing lithium are an important enabler in the global transition towards more environmentally sustainable transport, but may score poorly insofar of their environmental metrics when considered in isolation.      

Impact Investing

Nanuk’s primary objective is to deliver excellent risk and return outcomes to its clients through its sustainably-themed investment approach. Investment decisions are made on this basis and not directly in relation to measureable sustainability outcomes.  However, companies within the universe will typically demonstrate a clear connection with one or more of the UN’s Sustainable Development Goals (SDG’s), whether directly measurable or not.  Notably, Nanuk’s investment portfolios provide diversified access to 7 of the UN’s 17 SDG’s at this connective level.  

Source: United Nations.  https://sustainabledevelopment...


Nanuk’s investment team engages with and conducts meetings with corporate management in relation to current and prospective investee companies.  The firm does not place specific emphasis on investor activism in relation to ESG issues, but it does engage with management teams on sustainability and governance issues as they arise in the normal course of business. 

Nanuk sees itself as a leader in investments associated with sustainable and efficiency technologies and believes that it facilitates better long-term decision-making through engagement in public and policy discussion related to sustainable development.                 

Proxy Voting

Nanuk’s approach to proxy voting is guided by the belief that investment decisions should favour proposals that maximize shareholder value and are free from conflicts of interests.  Nanuk will vote against proposals that it identifies as being at odds with the firm’s views on sustainable business and governance practices. 

The Sustainability Revolution

The Agricultural Revolution marked a dramatic increase in agricultural productivity through improved farming practices and mechanization.  The Industrial Revolution of the 18th and 19th centuries marked the transition to new manufacturing processes towards powered, special purpose machinery, factories and mass production.  The Digital Revolution commenced in the 1980s and marked the transition from electronic and mechanical devices to digital technology.  

Climate change, pollution, environmental degradation, resource scarcity and demographics are key drivers behind a notable shift in public opinion, corporate behavior and public (government) policy directed towards improving global environmental sustainability and resource efficiency.                         

The Sustainability Revolution, in Nanuk’s view, has now commenced, driven by sustainable technologies reaching economic viability and surpassing and supplanting existing technologies and industries in coming decades.  This unstoppable sustainability trend is evident in the growing number and size of the global, publicly-listed companies which populate the 8 industries groupings defined in Nanuk’s investment universe.  As at September 2017, Nanuk’s investment universe comprises close to 1,000 securities and accounts for around 9% of the global listed equity market capitalization. 

In line with major transitions seen in prior ‘revolutions’, it is Nanuk’s belief that responsible, sustainable investing in the environmental sustainability and resource efficiency themes will become a mainstream of investing in years to come.    

Contact Nanuk for more information