CBS SFC Global Select ESG Fund – A reintroduction

CBS SFC Global Select ESG Fund (the Fund) is a virtual investment fund that aims to achieve long-term capital growth through a portfolio of equity investments in companies that are positioned to benefit from developments related to environmental and societal challenges.

The Fund's purpose is twofold.

First, the underlying organisation powering the Fund, CBS Sustainable Finance Club (CBS SFC), is of the opinion that allocating capital towards companies taking social and environmental responsibility is an important part of steering towards a more sustainable future. The reasoning behind this is that by promoting capital flows towards such sustainable companies (ESG Leaders), and away from unsustainable companies (ESG Laggards), one can reduce the cost of capital of the ESG Leaders and increase the cost of capital of the ESG Laggards. Such mechanics will incentivize companies in taking on more social and environmental responsibility, and thus support a more sustainable future.

Second, CBS SFC is of the opinion that companies being ESG Leaders offer better risk-adjusted returns compared to the ESG Laggards. There are many factors underpinning this. For instance, empirical research finds that companies with a strong ESG profile are more competitive than companies with weak ESG profiles. Also, empirical research suggests that companies with a strong ESG profile show lower idiosyncratic and systematic risk, compared to companies with weak ESG profiles. These different factors affect the different valuation channels of a company and thus suggest the view that ESG Leaders outperform ESG Laggards.

Based on these two foundational reasons, this virtual investment fund aims to invest only in the most socially and environmentally responsible companies (the ESG Leaders), in order to promote responsible investing and to emphasise that it is indeed possible to be Doing Good While Doing Well.

To this end, the portfolio team of CBS SFC Global Select ESG Fund will in the coming months analyse and select the leading sustainable companies worldwide, and publish our analyses on our blog, in order to promote sustainable investing and inspire others. In these blog posts, we will focus on the investment thesis of the selected company, both in terms of growth potential, but of course also in the perspective of ESG and sustainability.