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Case Study

Finance for a sustainable society at Triodos Investment Management: An ESG portfolio investment decision

By Vanina Farber and María Helena Jaén

18 pages

November 2021

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Reference: IMD-7-2309

This case provides the opportunity to perform a real, but simplified, ESG research analysis and portfolio investment decision from the perspective of an impact investor. It was designed using Triodos Investment Management (Triodos) and three well-known (possibly controversial) companies, Yamaha Corporation, Tesla and Philip Morris International (PMI). Students, as candidates for a research analyst position at Triodos, are asked to analyze the three companies, focusing on an ESG assessment following Triodos’s investment approach. They need to provide a compelling statement about the companies’ value propositions, as well as their positive and negative impact on people and the planet. They must build a comprehensive investment case that explains the rationale for (i) investing with no reservations, (ii) investing and engaging on controversies, or (iii) excluding Tesla, Yamaha and/or PMI and describe why the companies are good, potentially good or not good for the planet and for people. Students must weigh the controversial ESG issues resulting in a decision either to invest with engagement or to exclude the companies from Triodos’s portfolio against the innovative products and future potential of the companies. Henk Jonker, Head of Research, Impact Equities & Bonds at Triodos, invites IMD MBA students to apply for a research analyst. He wants entrepreneurial and “out-of-the-box” thinkers who push the limits of traditional financial analysis. The case tests students’ affinity with Triodos’s mission and vision, their analytical and financial skills, and whether they have a results-oriented, well-organized and problem-solving attitude. It examines their ability to integrate ESG criteria in their recommendation to include the companies in Triodos’s fund or exclude them. During an interview, Jonker aims to evaluate the students’ insights about their role as sustainable investors and the impact of their decisions on people and the planet.

Learning Objective

Describe different ESG investment methodologies (values based, best in class, active ownership and engagement)
Implement the ESG integration process in an investment decision
Critically reflect on the role of financial institutions in engaging for business model transformation.

Keywords

Responsible Leadership, Environmental Social and Governance, Sustainable Investment, Responsible Investment, Sustainable Finance, Investment Decision, Engagement, Sustainability, Good Health, Well-being, Gender Equality, Decent Work Conditions, Economic Growth, Responsible Consumption, Responsible Production, Diversity, Equity, Inclusion, Finance, Investment

Settings

Europe, Netherlands
Triodos Investment Management, Finance and Insurance, Banking, Finance and Insurance, Financial Services
2021

Type

Field Research

Available Languages

English

Related material

Teaching note

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