Sierra Club Green Alpha Portfolio

Eco-efficiency is an inherent part of risk and return for businesses regardless of enterprise size or economic sector of activity.  In a warming, resource-constrained world, transition to an eco-efficient economy is the only viable path for global financial health.  Investing in companies representing the Next Economy^TM is the clearest path to long-term capital appreciation.

We believe that the best way to generate investment returns in this new world revolves around environmental sustainability. Investing in the next, green economy helps mitigate climate change, promotes both energy security and national security and, importantly, helps rebuild the economy with high quality, long term jobs.  Companies in Green Alpha portfolios are selected because they are in some way working toward these goals. Each is a leader in its field and each has above average prospects for growth in the rapidly expanding green economy.  This is part of our overarching investment thesis and it applies to all our portfolios. 

The Sierra Club Green Alpha Portfolio is unique among our portfolios in that it is a blend of Green Alpha Advisors' Next Economy universe and the Sierra Club's proprietary green investment guidelines, which they have used for decades to ensure they invest in only the least environmentally detrimental companies.  The intersection of these two cutting-edge green stock selection processes produces the Sierra Club Green Alpha Portfolio, possibly the  greenest stock portfolio on Earth.

Green Alpha Advisors' research process employs proprietary, research-intensive macro-economic criteria to identify publicly traded companies with business models optimized for eco-efficiency; and also business models that address one or more of the economic-environmental challenges facing civilization.

Methodologies used to appraise the long-term shareholder value potential of each company integrate bottom-up, fundamental analysis with explicit assessment of business model externalities and top-down macro-economic constraints. In effect, from the top down we ask 'what are the greatest environmental risks facing civilization, and what are the sectors, industries and companies best positioned to address these issues?' From the bottom up, we evaluate which of those companies are the healthiest, with the best management teams and the best possibilities for rapid growth.  The output of this process produces a set of companies on the eco-efficient frontier.  For the Sierra Club Green Alpha Portfolio, this universe is then screened to ensure compliance with the Sierra Club's strict environmental criteria, and then further reduced to reflect our best ideas on an ongoing basis, as an active long-equity strategy.