The Tuck ESG Fund is dedicated to demystifying the investment process as it relates to Environmental, Social and Governance (ESG) criteria while creating an experiential learning opportunity for students preparing them to become leaders in the space.
Defining ESG
Environmental criteria: examine a company’s general impact on the environment and any mitigation actions related to resource efficiency and pollution reduction. Directors examine a spectrum of criteria including, but not limited to the following:
- Carbon emissions
- Energy and water efficiency
- Waste management
- Investment in clean and renewable technology
Social criteria: examine how a company manages relationships with key stakeholders including employees, customers, the local community and the government. Directors examine a spectrum of criteria including, but not limited to the following:
- Diversity and inclusion initiatives
- Workplace health and safety
- Community relations
- Customer privacy and data security
Governance criteria: examine a company’s corporate activities that are publicly disclosed and are tied to the functionality of the firm. Directors examine a spectrum of criteria including, but not limited to the following:
- Board structure and composition
- Executive compensation
- Shareholder rights
- Risk management strategy
Fund Strategy
When evaluating potential portfolio companies, Fund Directors will review a variety of inputs including ESG ratings, as reported by major ratings agencies, as well as publicly available reports published by target firms. Directors will compare how target companies perform relative to their peers and will also explore creative information sources to gain a deeper understanding of the inner workings of the business.
The fund seeks long-term capital appreciation, by investing in:
- Companies with ESG strategies that will generate higher risk adjusted financial returns than the broad market average over time.
- Companies that implement above average ESG practices, and can do so without having to sacrifice long-term financial results
The Fund is benchmarked against a publicly traded ESG Index, with position weights adjusted to reflect the Fund’s mandate.
Investment Criteria
The Tuck ESG Fund evaluates companies based on the previously outlined ESG criteria, acknowledging that not every company will necessarily meet each point precisely, but on net ensuring that any of the firm’s positive externalities outweigh any identified negative externalities.
The Tuck ESG Fund limits eligibility into the fund based on the following criteria:
- All companies are listed on the US stock exchanges
- All companies meet a minimum of $100 million of market cap at the time of investment
