Is it a green front? Is it a short-seller? Run by young twin brothers, Snowcap’s aim is to turn ESG investing on its head.
| During the battle over AGL’s now-torpedoed demerger plan, the headlines were largely grabbed by the beleaguered energy company’s critic-in-chief, Mike Cannon-Brookes., which describes itself as an activist environmental, social and governance investor.
Whereas most ESG investors are seeking companies worthy of investing in, and/or getting out of companies that aren’t worthy – that is, doing positive and negative screening – the Kinnersleys are looking for ESG underperformers they can pile into. Their other big motivating idea is that turning around an underperforming ESG vessel usually means looking at the captain as well as the engine.“Companies with major environmental and/or social issues are often the result of major governance failings. So, that leads to an interesting dynamic when you can use the ‘E’ or ‘S’ issues to highlight the ‘G’ issues.
“Whatever we find, we want to make a tangible link to shareholder value, and that can be upside or downside,” Chris says. “In many ways our approach borrows from private equity, in the sense that we take concentrated bets. The big difference is that we also have the ability to go short.”“But it’s not systematic,” Henry says. “It’s about individual situations where the stars align, and you can really effect change.