Carnot Impact Investing comprises a targeted allocation of capital to companies with positive effects as well as a commitment by the portfolio manage.

Less Consumption Through Better Efficiency

Carnot Impact Investing focuses on reducing the consumption of natural resources. The focus is on products, technologies and services that conserve natural resources or use them more efficiently as production factors. We assign the concrete fields of application to the basic elements fire (energy), water, earth and air.

“We invest in innovative companies with resource-conserving technologies. We regard the financial return as a prerequisite for sustained positive impact. To determine the impact, we do not use databases, but expertise and detailed work.”

In-depth financial analysis evaluates the return potential of an investment and ensures that financial returns are a priority. As a supervised “Independent asset manager of collective investment schemes” and specialist in equities, Carnot relies on an active strategy. The portfolio managers combine the value approach based on financial ratios with the impact and sustainability analyses to form the “blend approach”. In this way, financial added value is created in various ways:

a) Growing demand: companies that use their innovation and knowledge to help preserve the climate or solve other environmental problems benefit from growing demand.

b) Risk reduction: The lower consumption of energy and resources reduces the negative external effects and thus the risks.

 

IMPACT DEFINITION

We check and document the impact of each portfolio company based on a comprehensive check grid. (Impact Questionnaire). We examine, among 3 United Nations (2015), Sustainable Development Knowledge Platform, SDGs. other things, whether the reduction of resource consumption is part of the strategy, what R&D expenditure the company incurs, which products contribute to the conservation of resources, what benefits they bring ecologically and financially. We check and record which sustainable development goals are strongly influenced and to what extent and present the results in aggregated form as a heat map. (SDG mapping3 ). This in-house, comprehensive evaluation provides the basis for impact reporting with the SDG Impact Ranking List and the Impact Heatmap. Details about the implementation and evaluation can be found in chapter 4 of this study.

Integral Sustainability: More than ESG

The sustainability analysis is not only prepared through negative screening (exclusion lists, topdown), but also through positive screening (ESG rating, bottom-up), which increases the quality of the analysis many times over. Since commercial databases only provide parts of the ESG data set, we contact the companies directly and collect the missing information with our ESG questionnaire.

Engagement

If the Carnot analysis reveals questions (e.g. regarding corporate governance) or suggestions for improvement (e.g. reporting on the impact of the company), we make use of our contacts at management level and address these engagement issues personally. Our Engagement Questionnaire shows this step in the process.

 

IMPACT AREAS

Climate Protection

Building Technology

Emissions Reduction

Energy Efficient Industries

Closed Loop Economies

Installation Systems

 

Impact Investing

English /  German

Impact Investing

English / German

Impact Investing

English / German

 

Our research paper on the topic of impact investing in public equities contains an in-depth analysis of our approach and is available in both German and English.

 

In cooperation with Belimo, Carnot Capital published an Impact Case Study. The focus is on the tangible effects triggered by the Carnot investment process: Which areas are affected by the funds? Where do the portfolio
companies achieve tangible improvements and reduce energy and resource consumption?

Belimo shows how a manufacturer of energy-efficient products passes the financial, ESG and impact analysis test as an example.

Impact investing has long been limited to the topic of microfinance and is now becoming increasingly relevant and important in other asset classes as well. Impact Investing addresses a growing desire of investors and to be accountable for the effects of one's own activities in the world is increasingly part of the strategy process of companies as well. Such an approach goes far beyond a usual ESG analysis.

Belimo is an excellent example of a company whose products make a significant contribution to combating climate change and at the same time yield economic benefits.

 

 

 

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