Our Investment Framework is based on Energy, Food and Water (EFW) Efficiency
It is based on the conviction that Natural Resources scarcity is one of the key challenges for the future. EFW Capital Advisors is dedicated to explore the positive relationship between efficiency in Energy, Food and Water (EFW) and financial performance.
“Companies that incorporate Energy, Food and Water efficiency as an economic and industrial vision in their business models are most likely either to capture new growth opportunities or mitigate their financial and operational risks, in both cases generating higher risk-adjusted, long-term shareholder value creation for investors.”
We live in a world of constraints and limitations, where scarcity defines our environment. The manner in which companies address the challenges and risks of those limitations, with respect to their input costs, is vital to their prosperity. Historically, companies that have been more efficient in their input costs have been more productive and have outperformed their peers. Over the last 50-60 years, companies have addressed a series of distinct efficiency frontiers to combat scarcity, improve their productivity and develop structural cost advantages: from labor, process & capital to technology & information.
» Frontiers of corporate structural cost advantages
Source: Natural Capitalism; Introduction To Industrial And Systems Engineering
Our Investment Philosophy is based on the firm premise that natural resources are the new frontier of corporate efficiency, due to the growing structural imbalance between demand (population growth to 9 billion by 2030, urbanization, middle-class rise) and supply (infrastructure bottlenecks, higher extraction costs).
In particular, Energy, Food and Water (EFW) are resources essential and irreplaceable to economic growth. This growing issue of EFW scarcity is impacting the economics of traditional business models, and the very context determining how businesses will succeed. EFW constraints can lead to higher risk, lower growth and lower return on capital.
EFW resource supply is unable to meet current demand
A situation that is projected to deteriorate in the short to mid-term.
It is ESSENTIAL for companies to incorporate this new reality and treat natural capital as a strategic input cost.