KraneShares and Rockefeller Asset Management last month launched an ocean engagement ETF providing unique access to the blue economy.
The (KSEA ) invests in public companies with significant impact on oceans and ocean resources, reflecting the meaningful investment opportunities within the blue economy.
A subset of the ocean economy, the blue economy focuses on sustainable solutions that have ocean-positive benefits. The blue economy is projected to expand at twice the rate of the mainstream economy by 2030. Currently, the global economic output of the ocean stands at $2.4 trillion per year, according to the OECD.
Rockefeller seeks to generate positive change through its shareholder engagement work. Engagement is important as it has the potential to enhance a company’s returns over time and help companies get ahead of regulatory risk, Rockefeller said during a webinar on October 4.
Rockefeller’s ESG stewardship activities seek to use its position of ownership to influence companies to reduce risk and accelerate improvement. Stewardship activities include multiple levers, according to the firm: integration into research; influence during ownership, impact through proxy voting; and engagement with regulators and lawmakers.
How KSEA Invests
KSEA may identify and invest in companies that could be harming ocean health, if Rockefeller believes it can flip that negative to neutral or positive through shareholder engagement. According to Rockefeller, oftentimes, these companies are cheaper in valuation, presenting an attractive investment opportunity.
KSEA is not a high octane, high beta portfolio where many investors would recognize the names, Rockefeller said. The fund holds companies that may have lower valuations, but that Rockefeller believes will outperform and can improve through the firm’s investment engagement process.
The firm focuses on opportunities where it thinks it can create shareholder value and catalyze positive change.
Rockefeller, which refers to itself as constructivists not activists, has a four-step engagement process. The steps include constructive dialogue, sending an official letter, taking collaborative action, and finally shareholder resolution.
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