Episode S1E3: IntERVIEW OF Garvin jabusch, chief investment officer at green alpha advisors
Get your assets in front of the best solutions. “If a company’s net activities do not create a better world on an ongoing basis we should not own it.” - Garvin Jabusch @Garvin1313, CIO and Co-Founder of Green Alpha Advisors in conversation with Graham Sinclair on ESG and Coffee Podcast.
PHOTOCREDIT: ESG and Coffee Podcast, 2021.
OUR GUEST in S1E3: Garvin Jabusch @Garvin1313, CIO and Co-Founder of Green Alpha Advisors.
Our investor guest in S1E3 is Garvin Jabusch, Chief Investment Officer at Green Alpha Advisors who started his work in 1995. In 2021 his decades of work as an ESG+ investment manager has progressed, and he comes off having a triple digit calendar year investment return, 113.9% in 2020. The team also had a solid 2019. But being a popular investment manager is a mixed blessing. Inspired by Garvin, I tried pitching Garvin on investing in my instant idea: “Growth & Income Gravel Bikes” (!) and he was a good sport and broke it down using his investment philosophy and process.
I think we first met at an ESG investment industry conference around 2004, where Garvin was promoting his Sierra Club Mutual Fund strategy he ran for Forward Funds. I kept the cap (see pic, below) because it’s khaki so excellent when you’re on safari in Southern Africa, and as a keepsake because I referenced the Sierra Club strategy in my first ever academic paper in 2004, which I was generously invited to contribute to by Professors Terrence Guay (Penn State) and Jonathan Doh (Villanova University), see below.
One of my favorite memories of this interview was the imagine of Garvin as a kid up a cherry tree in Utah, and his groan when I described his spicy answer to “are you fossil fuel free?! Garvin is candid, spicy and made for one of the highest quality ESG and investing conversations you can listen to.
Please see show notes below for more, and see the episode landing page at www.esgandcoffeepodcast.org.
Let us know on Twitter @ESGandCoffee what compelling investment humans we should interview, and to stay posted on upcoming episodes.
Thank you for listening.
Graham and Kat
29 July 2021.
DISCLAIMER: Not investment advice, do you own research.
DISCLAIMER FROM GREEN ALPHA ADVISORS: Nothing in this podcast should be construed to be individualized investment advice, and not a recommendation to buy, sell, or hold any specific securities. At the time this podcast was recorded (April 9, 20201), Green Alpha Advisors, LLC held at least some client assets in BioNTech (BNTX), Kandi Technologies (KNDI), Moderna (MRNA), Tesla (TSLA), TPI Composite (ticker TPIC), and Vestas Wind Systems (VWDRY). At the time this podcast was recorded, Green Alpha Advisors did not hold any client assets in BP (ticker BP), Equinor (EQNR), General Motors (GM), Orsted (DNNGY), Toyota Motor (TM), or Volkswagen (ticker VWAGY). Please see additional important disclosure information here: https://greenalphaadvisors.com/about-us/legal-disclaimers/"
SHOW NOTES:
@Garvin1313: “evolving asset management to meet the new era of technological and climate disruption”
LinkedIn: “Advancing the next, green, circular economy by identifying and investing in companies providing solutions to civilization's most critical issues, and earning competitive shareholder value in the process.”
INVESTMENT PHILOSOPHY:
“Problems aren’t worth much. Solutions have value.” - Garvin Jabusch, 2021.
QUOTES
“He founded Green Alpha in 2007 on the premise that smart investors should be putting their money in the next economy — post-carbon companies — that he believes will ultimately win as climate change becomes more acute and renewable energy cheaper and more plentiful.”
“We understand that high-functioning, innovative companies creating and accelerating solutions to system level risks like the climate crisis, resource degradation, worsening inequality, and the human disease burden are the greatest growth drivers of the twenty-first century.” June 2021 https://greenalphaadvisors.com/wp-content/uploads/2021/07/Sierra-Club-Green-Alpha-20210630.pdf vs MSCI All Country World Investible Market Index.
“By creating innovative solutions to systemic risks, Next Economy companies drive the development of a genuinely “sustainable” economy. As a result, Green Alpha believes solutions-focused investing is also the clearest path to competitive returns.” Green Alpha Advisors Form ADV Part 2 25 March 2021.
“Conventional environmental, social, and governance (ESG) criterion are meaningless if a company’s product and service mix does more to cause risk than solve for it, so ESG business model measurements must be assessed after a company’s revenue mix is deemed to be positively impactful …because the time for marginal impact has long since passed” - Green Alpha Advisors, January 2021
“Next Economy companies are gaining market share and protecting it by creating IP, displacing competition, and creating barriers to entry. This fuels sales growth, protects margins, and sustains free cash flow generation through market cycles” - Jigar Shah” Green Alpha Advisors, January 2021
“ The Shelton Green Alpha fund, run by Citywire AAA-rated Jeremy Deems and Garvin Jabusch, topped the list, returning 113.9% for one-year returns...While the firm is still relatively small — managing some $625 million — Kiplinger ranked it second out of all large-cap US mutual funds in 2019, when it delivered a 43.7 percent return. And 2020 proved to be even bigger.”
“Style Drift: we didn’t divest our portfolios of fossil fuels when it became trendy, because we never did invest in fossil fuels” - Green Alpha Advisors Overview, January 2021.
“Fossil fuel free since inception – we have never invested in companies that prospect, extract, refine, or transport fossil fuels, nor fossil-fired utilities or internal combustion engine manufacturers”
“Investment Philosophy: We understand that high-functioning, innovative companies creating and accelerating solutions to system level risks like the climate crisis, resource degradation, worsening inequality, and the human disease burden are the greatest growth drivers of the twenty-first century. Green Alpha’s investment philosophy is straightforward: don’t invest in companies that cause global systemic risks; instead, invest in the smartest, most rapidly evolving, economically competitive solutions. We expect such companies to gain market share, which makes investing in them our best chance at preserving and growing our clients’ purchasing power. Green Alpha is proud to be the only financial services firm licensed to utilize the Sierra Club’s rigorous investment guidelines. ” Sierra Club Green Alpha, December 31, 2020 Why Invest in Sierra Club Green Alpha? https://greenalphaadvisors.com/tag/sierra-club-green-alpha/
On sector moves since early April to late July 2021: “The most significant catalyst for our strategies was from the biotech space, which performed very well during Q2, due to intrinsic company news that provided an important catalyst for the gene editing-based therapeutics subsector. A widely-followed firm released results that in human patients, a targeted gene editing based treatment did produce the desired outcome in terms of disease mitigation, and it did so safely. This was the first time a published result showed that CRISPR/Cas9 gene editing therapy did indeed work in human patients in vivo, and it seemed to be the proof of concept that the market was waiting for. As a result, shares in the gene editing space, not just those of the company that published the results, did experience a significant rally.”
On new mandates: Pursuant to an Investment Sub-Advisory Agreement between Boston Common and Green Alpha, effective May 4, 2021, Green Alpha is appointed the sole investment sub-advisor with respect to the Boston Common Small Cap Social Fund, LLC, a Delaware limited liability company, and of certain separate accounts invested in the same small-mid cap investment strategy.”- Form ADV Part 2: Firm Brochure, Date Updated: May 05, 2021 https://greenalphaadvisors.com/wp-content/uploads/2021/05/Green-Alpha-Advisors-Form-ADV-Part-2-20210505.pdf
“I hope I am a good friend, uncle, brother, son…more important than anything I could pull off at Green Alpha.”
“[O]over long run holding carbon intensive assets is a terrible terrible investment that is not going to do well… if you are holding fossil fuels or major demand drivers, you are making an active bet on collapse…it’s a terrible idea.”
NAMES
TPI. Vestas Wind Systems. VW. Toyota. GM. Tesla. Equinor. Orsted. BP. Moderna. BioNTech. KANDI.
ACTION QUESTION
“Know what you own. Time of high risks. Solution sets. Get your assets in front of the best solutions. If a company’s net activities do not create a better world on an ongoing basis we should not own it.”
ARTICLES
Non-Governmental Organizations, Shareholder Activism, and Socially Responsible Investments: Ethical, Strategic, and Governance Implications by Terrence Guay, Jonathan P. Doh & Graham Sinclair, Journal of Business Ethics volume 52, pages 125–139 (2004) https://link.springer.com/article/10.1023/B:BUSI.0000033112.11461.69
JOBS
Hiring Equity Analyst https://greenalphaadvisors.com/green-alpha-is-hiring-equity-analyst-opening/
MEDIA
https://talkingpointsmemo.com/cafe/fix-climate-big-finance-government-need-get-in-game
https://www.barrons.com/articles/10-most-sustainable-reits-calvert-51613692072
MATERIALS
https://blogs.sierraclub.org/gaa/archives.html
https://sierraclub.typepad.com/gaa/
https://sheltoncap.com/wp-content/uploads/2020/04/Green-Alpha-Commentary-1Q2020.pdf
https://www.linkedin.com/pulse/green-alpha-advisors-introduces-next-economy-social-index-moszeter/
https://greenalphaadvisors.com/wp-content/uploads/2021/07/Sierra-Club-Green-Alpha-20210630.pdf
LEGAL AND FILINGS
https://greenalphaadvisors.com/about-us/legal-disclaimers/
https://greenalphaadvisors.com/wp-content/uploads/2021/03/GAA-Form-ADV-Part-1_2021.03.25.pdf
https://greenalphaadvisors.com/wp-content/uploads/2020/05/Green-Alpha-Advisors-Form-CRS-20200529.pdf
ORGANIZATIONS
KLD https://wrds-www.wharton.upenn.edu/pages/about/data-vendors/kld-research-analytics-inc-kld/
BOOKS
Upon a Burning Throne (The Burnt Empire Book 1). by Ashok K. Banker. https://www.hmhbooks.com/shop/books/upon-a-burning-throne/9780358299295
PEOPLE
E.O. Wilson https://eowilsonfoundation.org/e-o-wilson/
Gordon Getty https://en.wikipedia.org/wiki/Gordon_Getty
Peter Kinder co-founder of KLD https://thebell.us/about/
VIDEO
Homer's Pumpkin investment https://youtu.be/kDM0GLVTj_k
COFFEE
Straight black medium roast. Hannah at Old Oaks Coffee Shop in Niwot. https://niwot.com/food-drink/the-old-oak-coffee-house
“[L]ong run holding #carbon-intensive assets is a terrible, terrible investment that is not going to do well… if you are holding #fossilfuels or its major demand drivers, you are making an active bet on collapse…it’s a terrible idea”. #ESG #climate 1/5 https://twitter.com/ESGandCoffee/status/1420445551322181633?s=20
“[Garvin Jabusch] has enjoyed the halo ( and the burden) of being a “5 star” rated fund manager with triple digit calendar year returns. And all their funds have been fossil fuel free since inception, either #fossilfuel suppliers or where it is a major demand driver for hydrocarbons. Yes, the strategies have been long $TSLA… 2/5 https://twitter.com/ESGandCoffee/status/1420445551322181633?s=20
“In S1E3 dropping 29 July, our investor says: “Conventional #ESG criteria are meaningless [unless] ESG business model measurements [are assessed after] company’s revenue mix is deemed to be positively impactful…because the time for marginal #impact has long since passed” 3/5 https://twitter.com/ESGandCoffee/status/1420518343602315273?s=20
In S1E3 dropping 29 July, our investor guest is described on Twitter as “evolving asset management to meet the new era of technological and climate disruption.” Our conversation covers the legendary work of E.O.Wilson, how well to write a sell discipline for investor gatekeepers, and the love of cherries. 4/5
In S1E3 today, our investor guest is pitched an investment idea by @esgarchitect, a gravel bike co for the Boulder CO community. So our investor is a good sport, puts it thru the sustainable investing case process on the spot (has defensible IP? better brand? Solid cash flow?) It’s a solid “maybe”! #GIGbike 5/5
DISCLAIMER: Not investment advice, do you own research.