Janus Henderson x Berkeley Insight Collective: Enhancing financial outcomes through climate and biodiversity insights
Janus Henderson’s exclusive partnership with UC Berkeley Executive Education represents a vital step in upskilling our investment teams to make more informed investment decisions to help create better financial outcomes for our clients.
4 minute read
Key takeaways:
- Janus Henderson recognises that clients expect financially material risks to be factored into decision-making and has partnered with top academics at UC Berkeley to co-develop a curriculum aimed at achieving that.
- The first phase of the Janus Henderson x Berkeley Insight Collective focuses on educating our investment teams on critical issues including climate and biodiversity to better integrate these financially material risks and opportunities into their investment decision-making.
- Our partnership is designed not only with our investment professionals in mind. For our clients, subsequent phases will enable ongoing collaboration with Berkeley professors on climate change and biodiversity-related research.
In today’s increasingly complex markets, financially-material environmental, social, and governance (ESG) factors are integral to investment strategies. Our investment teams marry their fundamental sectoral expertise with a growing understanding of ESG risks and opportunities, including climate change and biodiversity, which affect so many segments of the market. Reflecting the importance of this approach, Janus Henderson Investors has partnered with the University of California, Berkeley Executive Education (UC Berkeley) on an Insight Collective education programme aimed at benefitting investment professionals and clients alike.
Michelle Dunstan, Chief Responsibility Officer at Janus Henderson:
“Climate change and biodiversity are two of many factors that can impact cash flows, valuations, and cost of capital. Our work with the UC Berkeley faculty will give investing teams, and ultimately clients, the tools they need to enhance holistic financial assessments of company performance.”
Interweaving ESG into investment practices
Every day, our centralised Responsibility Team collaborates with our investment teams to discuss financially material ESG topics, improve risk management, and identify opportunities, with the aim of enhancing outcomes for clients. We recognise that our in-house ESG and investment subject matter expertise can be married with and further benefit from partnership with others, including those in academia.
Lucas Klein, Head of EMEA and Asia Pacific Equities at Janus Henderson:
“We see significant benefits in our investment teams being equipped with the skills to analyse the financial risks associated with ESG factors. Mitigating or avoiding these risks can have a financially material benefit to our clients and their clients. Our investment professionals are already well-versed in this but making this education available to all only strengthens the offering, and is consistent with our partnership approach of ‘Investing in a Brighter Future Together’.”
Client-centric ESG integration
Direct education of portfolio managers, research analysts, and investment professionals directly involved in asset allocation can help them build portfolios that reflect the complex realities of the world, addressing both opportunities and risks. Janus Henderson and the UC Berkeley faculty have co-developed a curriculum tailored to portfolio managers and analysts, with a strong focus not just on the scientific concepts concerning climate change and biodiversity, but how investors can implement this enhanced understanding into their investment decision-making.
For example, James Salle, Professor, Haas School of Business and Rausser College of Natural Resources, module on ‘Valuing Nature and Biodiversity’ examined how the Gila monster, a seemingly unremarkable lizard, holds an astonishing market value of US$500 billion, thanks to its role in the development of the diabetes medication Ozempic. This valuation underscores the immense potential that lies within biodiversity, highlighting how the existence of a single species can lead to groundbreaking medical innovations, such as GLP-1 receptor agonists. The decades-long journey to uncover its pharmaceutical benefits demonstrates the option value inherent in preserving species, as it remains uncertain what future discoveries might emerge from nature’s vast repository of biological diversity.
Dara O’Rourke, Associate Professor at UC Berkeley’s Rausser College of Natural Resources:
“Managers and investors need to be able to measure and act on the short and long-term risks to supply chains from climate change. Here at UC Berkeley, we are bringing together the latest climate science, with business analytics, to support the innovations we need to drive climate solutions.”
The Janus Henderson x Berkeley Insight Collective is key to gaining a deeper understanding of how climate change and biodiversity can financially impact investments. It is aimed at furthering Janus Henderson’s purpose of investing in a brighter future together and creating better financial outcomes for clients.
Janus Henderson x Berkeley Insight Collective – Content Series
This introductory article is part of a larger content series showcasing the Janus Henderson x Berkeley Insight Collective. In upcoming instalments, we’ll explore the critical insights and learnings from the co-developed curriculum that aims to empower our investment teams to make more informed decisions on behalf of our clients.
Cash flow: The net balance of cash that moves in and out of a company. Positive cash flow shows more money is moving in than out, while negative cash flow means more money is moving out than into the company.
Environmental, Social and Governance (ESG) factors relate to the quality and functioning of the natural environment, the rights, well-being and interests of people and communities, and the governance of companies & their stakeholders.
ESG integration: The consideration of financially material ESG risks and opportunities throughout the investment process.
Valuation metrics: Metrics used to gauge a company’s performance, financial health and expectations for future earnings, e.g. price to earnings (P/E) ratio and return on equity (ROE).
These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. References made to individual securities do not constitute a recommendation to buy, sell or hold any security, investment strategy or market sector, and should not be assumed to be profitable. Janus Henderson Investors, its affiliated advisor, or its employees, may have a position in the securities mentioned.
Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.
The information in this article does not qualify as an investment recommendation.
There is no guarantee that past trends will continue, or forecasts will be realised.
Marketing Communication.
4 minute read
Key takeaways:
- Janus Henderson recognises that clients expect financially material risks to be factored into decision-making and has partnered with top academics at UC Berkeley to co-develop a curriculum aimed at achieving that.
- The first phase of the Janus Henderson x Berkeley Insight Collective focuses on educating our investment teams on critical issues including climate and biodiversity to better integrate these financially material risks and opportunities into their investment decision-making.
- Our partnership is designed not only with our investment professionals in mind. For our clients, subsequent phases will enable ongoing collaboration with Berkeley professors on climate change and biodiversity-related research.