Light Green Advisors
believes companies that demonstrate effective environmental leadership
have a competitive advantage that will result in sustained top-tier
financial performance. With returns that closely track the S&P
500, LGA investors know that environmental responsibility and
financial performance go hand in hand.
LGA is different from
other "socially" responsible investment advisors. We focus
on a company's investment and environmental performance—not on the
statements they make—and we do not blend all social concerns
together. LGA evaluates and ranks all major industry sectors separately to determine which companies are the most environmentally responsible within their industry.
philosophy is unique. Unlike traditional "ethical" or
"social" investing, we do not compare companies across
industry lines or exclude whole industry sectors.
LGA recognizes that the economy is built on interdependence. For
instance, the software industry cannot exist without computer
hardware, and hardware requires plastics, metals and energy. All
industries rely on one another.
has developed and uses a new quantitative model of corporate
environmental behavior and investment performance to select the
"best of class" in every major industry sector except
LGA emphasizes corporate
performance. We believe that companies that have a track record of
success operating with lower levels of environmental problems and
penalties than their industry peers will have lower environmental
overhead costs in the future.
LGA's emphasis on
historical performance as a guide to future profitability is
distinct from the traditional approaches that rely on corporate
statements as a substitute for environmental performance. LGA's
approach is grounded in reality rather than rhetoric.
environmental progress based on success companies achieve in
improving their environmental performance and reducing their
environmental costs in relation to corporate profits. We believe
the more successful a company is environmentally, the more capital
is available for shareholder returns.
LGA's index products provide an
incentive for companies to improve. Ecologically progressive
companies need to maintain their top performance to stay in the Light
Green Eco*Index and Eco Performance Portfolio™.
resembles the quantitatively derived index products developed by
BARRA* and others. Like the Barra S&P500 Growth Index™, the
composition of the Light Green Advisors Eco*Index™ is updated
based on changes in certain environmental/financial ratios of
firms in a benchmark index such as the Standard & Poors 500.
In contrast, many
market indices can result in a static personal index composition
that remains constant even in the face of inevitable changes that
occur in corporate environmental performance and corporate
LGA concentrates exclusively on an
The LGA investment
process is oriented around systematically managing one set of
important risk factors, environmental risk, in a coherent manner
and adding value through that management process.
Our goal as an active, quantitatively-oriented investment manager
is to add value for investors and promote corporate environmental
responsibility throughout the economy.
* Barra is an investment
consulting firm. Barra is not affiliated with Standard and Poors or
Light Green Advisors.