Sustainable value
We launched our first screened fund in 1988, marking the start of a long-term commitment to sustainable investment. Our entire product range aligns with the goal of delivering superior investment performance over the long term while making a positive contribution to both people and the planet.
What we do
The EdenTree Sustainability Standard
Across our range of funds, we seek to identify companies that create value for people, the planet and investors through their products, services and operations. We believe that investing in companies creating value through strong sustainability practices will enable us to build portfolios that are not only sound long-term investment propositions, but which also generate positive outcomes for people and the planet.
Our framework for doing so – The EdenTree Standard – sets out clear expectations of the companies we invest in to demonstrate value. We assess companies against these expectations to determine how much value they are creating, and to identify sustainable leaders.
The value of an investment and the income from it may go down as well as up and the investor may not get back the amount invested.
Case studies
Our assessment in action
Enel SpA
Enel SpA
Company profile
Enel is involved in the generation, distribution and sale of electricity and gas. The company is the world’s largest operator in the renewable energy sector.
Overview
- Enel demonstrates strong performance across all material impact areas.
- The company has an industry-leading Climate Transition Plan and demonstrates a clear downward trajectory in its emissions performance.
- It also has a robust plan to phase out thermal coal, with phase-out plans for its remaining coal plants due to complete by the end of 2027.
- Enel runs strong initiatives around the involvement of local communities, as well as reducing energy poverty in vulnerable groups. It also has industry leading human rights policies, processes and disclosures covering all major impact areas.
- Enel makes a strong contribution to our “clean energy” theme. At present, over 50% of the company’s revenue is derived from renewable energy generation. The company is making significant investments in the energy transition, which will help it reach 73GW in renewable capacity in 2026, accounting for 86% of its generation.
Areas for improvement
- Community engagement and indigenous rights.
- Health and safety performance following a localised spike in incidents.
Veolia Environnement S.A.
Veolia Environnement S.A.
Company profile
Veolia Environnement specialises in environmental services, including water treatment and distribution, waste collection and recycling, and energy production and management.
Overview
- Veolia has a strong strategy for increasing its positive impact, but there are areas where it is yet to fully deliver its stated aims. Further progress in these areas would push it into the higher rating of “maximising value”.
- The company has climate commitments aligned with the Science Based Targets initiative. These are backed by a detailed transition plan, including a commitment of €600m capex for decarbonisation between 2024-2027 (the company has already delivered €133.5m).
- Veolia is committed to upholding human rights, with a focus on preventing modern slavery and human trafficking.
- Veolia contributes to our “water”, “clean energy” and “circular economy” themes. Combined revenue across these three themes is over 50%. Veolia has developed services to reduce the energy consumption of clients, promote recycling, provide clean water to millions of people, and has developed a comprehensive solution for tackling PFAS.
Areas for improvement
- Health and safety.
- Further progress on the increase of renewable generation.
- Further progress on circularity, including recyclability and reuse of waste streams over incineration.
MercadoLibre Inc.
MercadoLibre Inc.
Company profile
MercadoLibre is a US-listed Argentine company operating online marketplaces dedicated to e-commerce and online auctions.
Overview
- Due to concerns around the negative social and environmental impact of MercadoLibre’s operations, the company is considered to be “damaging value” and is not investable in EdenTree’s funds.
- The company has reported rising involuntary turnover, incident rate increases and a shift from part-time employees to temporary contracted workers – all signalling a preference for poor labour practices to meet its 24-hour delivery goal.
- On the environmental side, there is limited transparency around the significant increases in emissions, energy use and water consumption as the business has grown.
- MercadoLibre contributes to our “financial inclusion” theme by increasing access to finance to underserved populations in Latin America. The Mercado Pago value proposition, focused on segments of the population that usually do not have traditional bank accounts, supports the democratising of financial services. However, this positive contribution is not sufficient to enable investment within EdenTree’s funds.
Areas for improvement
- Labour rights and protections.
- Whistleblowing reports relating to potential human rights breaches.
- Customer protections procedures and banned product list implementation.
- Due diligence and audit, particularly for suppliers and information security.
Our expectations
Our expectations cover 13 key sustainability factors under the pillars of People, Planet and Governance, and provide a starting point for our assessment of every company. They also provide a starting point for our engagement with companies.
People
We expect companies to respect human rights, provide decent work opportunities and provide opportunities for local communities. We also expect companies to understand and address relevant consumer-related risks and information security.
Planet
We expect companies to address challenges relating to climate change, water management, biodiversity and the circular economy.
Governance
We expect companies to exhibit strong governance with adequate business conduct, oversight and protection of shareholder rights.
Our insights
Insights
Identifying Sustainable Companies
The EdenTree Standard is our framework for assessing how sustainable a company is. At its core is the concept that sustainability is synonymous with value-creation for people and planet.
EdenTree Exclusions Policy
This document outlines the organisations we exclude, whose activities pose significant sustainability or ethical risks.
Oppressive Regimes
This briefing outlines our approach to what we call “Oppressive Regimes” – one of our negative screens applied across our range of funds.