Investors are increasingly using environmental, social and governance (ESG) criteria to evaluate companies in which they invest. Government policy in many countries is leading the way by supporting a scaling up of environmentally friendly energy generation and vehicle usage, and prioritising our social responsibilities such as delivering more affordable housing.
Gresham House (GHE:925p), a fund manager specialising in renewable energy generation, solar power, wind, forestry, infrastructure funds and public and private equity investment strategies, was well ahead of the game when I first highlighted its potential in my 2016 Bargain Shares Portfolio. The group now manages solar and wind projects that generate enough electricity to power 131,000 homes, manages 140,000 hectares of forestry that captures the equivalent CO2 generated by 266,000 people in the UK, and its funds are investing in 733 shared ownership homes this year alone.
The fact that Gresham House’s share price has trebled in the past five years not only reflects the increasing importance of ESG investing, but also the healthy investment returns the fund manager has produced that is driving strong organic growth. A series of shrewd acquisitions adds to the appeal, the latest of which was announced alongside eye-catching first half results.