The global commitment to net zero has accelerated, creating a secular multi-decade decarbonization trend.
We believe that incorporating a climate-oriented risk/reward framework into the investment process offers investors a generational opportunity to both drive impact and generate an attractive rate of return.
The convergence of these two objectives is at the heart of our value creation.
ScopeFour has developed a proprietary universe of ~3000 global all-cap publicly traded companies offering one or more climate solutions as a service or product. This versatile platform is the starting point for our alpha generation.Fact Sheet
Our ranking factors are combined with deep fundamental analysis to build a curated portfolio. Key attributes for a company’s inclusion into the portfolio are three-fold:
Determining whether a company is materiality tied to one or more climate solutions is not readily identifiable by using commercial datasets. We use deep fundamental analysis to pinpoint exposure through a company’s revenues, and where appropriate, also examine R&D, and capital expenditures.
Each portfolio holding has one or several climate and fundamental catalysts that will lead to future stock price appreciation. The companies with the strongest and most defensible catalysts will be assigned a higher multiple.
We seek companies with the ability to fund and grow their exposure to the business channel that reflects the climate solution. We look for strong free cash flow generation, low EBIT coverage and a history of earning returns over the company’s cost of capital.