Osmosis Investment Management has launched the first UCITS fund to directly address resource efficiency in a measurable, objective and consistent manner. The combination of a rapidly growing population and expanding consumer classes is escalating demand for goods and services just as the constraints on resource supply are accelerating.
The efficient use of resources has always been a feature of a well-managed, forward thinking business. However, until now, there has not been an explicit, objective metric from which resource efficiency – the ability to create more output from less input – can be identified at a company level. Osmosis has developed their Model of Resource Efficiency (MoRE) to answer this challenge.
MoRE is a quantitative process that uses public data to measure and compare resource efficiency amongst the world’s largest companies. Resource efficient companies tend to produce above average return on assets and equity, better asset yields and ultimately greater shareholder value.
The Osmosis MoRE World Resource Efficiency Fund (PGOMWFA:ID) is a long only portfolio of the most resource efficient large cap global businesses from across the worlds developed economies.
According to Gerrit Heyns, partner, Osmosis Investment Management; “Our methods are quite innovative, but our thesis is simple and intuitive; companies which are better at turning resources into revenue deliver greater shareholder value. And our results speak for themselves.”
Oxford University Endowment Management has allocated money to Osmosis. They, like other large institutional investors that follow the Osmosis thesis, recognize that companies whose products, processes and behaviours encourage the efficient use of resources display characteristics that are attractive to investors.
The model uses the actual observed levels of water used, waste created and energy consumed in the process of generating a unit of revenue in order to determine the resource efficiency of a business.
Mr Heyns added, “Most investors are genuinely sensitive to the concept of sustainability, but not to the detriment of investment returns. Our methodology is centred on the economic imperatives that drive sustainability. Ours is a return focused approach that provides huge sustainability benefits.”