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 Best of Class Investing

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.

LGA's investment 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.
• LGA 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 tobacco products.

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.
• LGA defines 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™.  

• LGA's Eco*Index™ 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 environmental/financial ratios.

LGA concentrates exclusively on an environmental responsibility. 

• 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.