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Redefining Sustainable and Responsible Investing

The next global economy is emerging in a new world full of unprecedented technologies, new ideas about resources and capital, and new approaches to business. Crucially, we are also being confronted with environmental and economic challenges never before imagined. The ‘next economy’ or ‘green economy’ approach to investment management asserts that the basics of the global economy are evolving in tandem with these changes and that methods of investment management must evolve with them. Green Alpha Advisors contemplates a future economy in which the next generation of asset management must be integral to and reflective of that next economy which both functions to support the integrity of earth’s systems and also can function within earth’s tolerances and finite resource base.

To appropriately invest in this emerging, green economy, one must appreciate that the next economy is by definition not the legacy economy of previous generations, and that it therefore requires a new understanding, new definitions and a new set of rules. To some degree, this requires redefining the parameters of modern portfolio theory to reflect this new world with its technologies and challenges. This in turn requires new economic models, new portfolio construction methods, and new sector classification schemes. Green Alpha Advisors approach to all three is presented here in brief.

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