67: Janus Henderson's Hamish Chamberlayne – sustainable investing & technological reliance

[i3] Institutional Investment Podcast

Hamish Chamberlayne is Head of Global Sustainable Equities at Janus Henderson Investors. In this podcast, we talk about Hamish' background in analysing energy companies, the sense and nonsense of ESG ratings, reliance on technology and opportunities in Australian listed companies. Please enjoy the show. Overview of Podcast with Hamish Chamberlayne 2:30 I’ve always been interested in how the natural world interacts with the financial world 3:25 Ironically, I started my career analysing natural resources companies 4:30 Energy is something that explains everything when you go deep down in the fundamentals 5:00 Ultimately, all energy comes from the sun and there is no rule that we have to use depleting fossil resources 7:30 What is the difference between a sustainable investor and an investor with a decent ESG policy? 8:00 We have always been very firm in our idea that it doesn’t make any sense to talk about ESG scoring 8:20 The idea that you can take all of these different issues and collapse them into a single score doesn’t stand up to intellectual scrutiny. 10:00 There should be no performance penalty if you are going to follow the sustainability route. Quite the opposite. 10:30 The natural world and the financial world don’t live in isolation. Recognising that is what sustainability is at its core. 14:00 The definition of sustainability is essentially the ability to generate wealth without jeopardising the ability of the future generations to generate wealth. This idea that we are not depleting. Yet, the economic model of today is one of depletion. 17:00 Are we relying too much on technology to invent our way out of the climate crisis? 18:00 Net zero, can we do it? Yes, but can we do it in time? That is the big question. 19:30 We need to move away from a fossil fuel, analogue economy to a digital, electrified economy 20:30 We took a very positive view towards COP 26 22:00 Don’t get distracted by the minutiae of COP 26; the general direction is very positive 22:30 China net zero by 2060: I’m very confident that they will beat that. 25:00 The pandemic and Atlassian. 26:30 We have never been an investor in Meta, or Facebook, but we do see a lot of applications of the metaverse in other industries 28:00 Inflation bears the seeds of its own destruction 30:00 Efficiency is one of our big investment themes. 31:00 Growth will always outperform Value when it comes to investing 33:00 Value stocks were cheap companies that still had growth. They were cheap growth stocks. But now we are in an environment where there isn’t universal, broad-based growth 35:30 I’m a value investor, investing in growth stocks. Because ultimately I want to invest where I see value 38:30 Looking at Texas Instruments gives you a snapshot of what is going on in the world today; this proliferation of technology in all parts of the economy 39:00 We see the electrification of transportation as one of the most bankable trends this decade. We find it too difficult to predict which companies are going to win, but ultimately they are all going to need all the widgets that go into an electric car. 40:45 Is the Internet of Things a sustainable theme with all the additional energy it needs?