Carnot Capital - Combining Good With Useful: Impact Investing in Energy & Resource Efficiency

Apr 05, 10:48 AM
Carnot Capital is an investment management company, specialized in the area of energy and resource efficiency. Carnot Capital is a signatory of the Principles for Responsible Investment (PRI) and measure the impact of their investments by mapping the UN's 17 Sustainable Development Goals (SDGs).

Andres Gujan is the Cofounder and Portfolio Manager at Carnot Capital. Andres Gujan was an analyst for engineering, real estate and electricity companies at Valartis Bank. In this context he was responsible of the investment portfolio of Valartis Bank, has been a consultant for institutional clients and involved in the issue of derivative investment products. Prior to that, he held leading positions in financial analysis at Bank Vontobel and at Kepler Equities, where he was a responsible analyst for the first share placement of BKW FMB Energy. Andres Gujan started his career at UBS. Andres Gujan is a graduate of the University of St. Gallen (lic.rer.publ.HSG) and is a chartered financial analyst (CFA).

Dominique Sekyra is the Head of Business Development at Carnot Capital. Dominique used to work for Knight Vinke (Switzerland) AG where he was responsible for Investor Relations. Prior to this, Dominique worked for the UHNWI team of Bank Vontobel AG's Private Bank. Dominique holds a Master of Science (MSc) in International Business Economics from the University of Westminster in London.

Highlights:
  • “We don’t buy sustainability reports, we buy good companies”
  • “At the time there were a lot of sustainable funds around, but we thought that these funds were not that sustainable. Because sustainability is also a financial aspect. A lot of these funds disappeared because they were investing in business models that were not sustainable in the end. So companies that went basically bust.”
  • Carnot capital has two well established  funds - Carnot Efficient Energy Fund and Carnot Efficient Resource Fund.
  • They also recently launched a circular economy index together with Bank Vontobel.
  • Investing in established companies with products and services in industrial, transport and buildings technology, rather than energy transition into renewables. They also invest in resource efficiency such as food sector for example fisheries, agriculture, clean air and clean water.
  • “And only if you ask those specific questions, you actually drill a little bit deeper than the usual biannual analyst call which is mainly very financial heavy, and governance heavy. We are able to ask a different set of questions to competing funds and that is our edge.”
  • There is a lag between how rating agencies analyse these companies and how we interpret these companies with dialogue and deeper research and ESG ratings.
  • Heatmaps of aggregation of the portfolio companies and SDG impact
  • “In our experience, it is impossible to do impact investing without being an active investor.”
  • “I think there will be two streets, two avenues. Either you analyze everything, and you analyze it with not enough depth or granularity, or you focus like us on a specific sector or even a specific portfolio.”
  • How partnerships with banks can scale impact investing -1) create actively managed certificates and create derivatives themed around resource funds 2) traditional managed accounts where they pick out the best qualities from niche impact investors
  • The challenges of climate change and resource scarcity will still be around after the coronavirus crisis.

Highlights:
[03:24] What is sustainable and impact investing?
[07:00] How the investments moved from reducing energy consumption to sustainable and impact investing
[16:20] Engagement with companies to push for efficiency numbers and realising these for investors
[21:00] Regulatory coming in that will impact footprint and handprint
[26:24] Methodology for assessing and measuring environmental impact
[31:46] Investor clients coming to Carnot Capital
[34:00] Active investing vs ETFs and passive investments
[36:07] Challenge of scaling funds like Carnot Capital’s
[38:09] Coronavirus crisis and its impact on the market 
[43:00] More about Andres and Dominique and what inspires them
[47:25] Call to action

Useful links:
Andreas Gujan’s Linkedin
Dominique Sekyra’s Linkedin
Andreas Walther - Chief Impact Officer of Carnot Capital Linkedin
Carnot Efficient Energy Fund
Carnot Efficient Resources Fund
Circular World Index
Carnot Capital Twitter
Carnot Capital Linkedin
Bertrand Piccard - Solar Impulse
Jeremy Rifkin - The New Green Deal


Connect with JP Dallmann on Linkedin, Twitter, or Instagram.
Contact us to help you transition into Sustainable & Impact Investing - ILA & Partners
How to incorporate SDGs into your business - Fast Forward 2030
Find talent and careers with impact - Realchangers
Impact Leaders is produced by Podcast Publishing