'Winning the future' with clean energy 
Recent policy announcements and political rhetoric have signalled a growing sense that 'clean technology' development is an essential component for future international competitiveness.

With the emergence of the final details of China's ambitious 12th Five Year Plan (FYP), we can see a much greater emphasis on 'green growth' and a determination to boost the global competitiveness of related key growth sectors. As part of this, China is planning an extensive alternative energy programme, which appears to be the world leader in its scale. Indeed, alternative energy features as one of the Chinese Government's seven strategic growth sectors, which also include alternative-fuel cars, energy saving devices and environmental protection.

Meanwhile, growing competition in the clean energy space is permeating the political agenda in the US. Speaking in March, President Obama placed great emphasis on the issue's central importance to the country's international standing, warning that "the countries that lead the 21st century clean energy economy will be the countries that lead the 21st century global economy."

Consistent with this theme, our ongoing programme of research and engagement seeks to identify both those companies that are well-positioned to benefit from related opportunities, and those demonstrating strong management of the associated risks.

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Transparency counts
Jupiter recently attended the 5th global conference of the Extractive Industries Transparency Initiative (EITI). Heads of states, government leaders, companies and NGOs gathered at the OECD in Paris to discuss the progress of the Initiative, which seeks to strengthen governance by improving transparency and accountability in the extractives sector.

The event coincided with a heightened focus on transparency thanks to a provision within the Dodd-Frank Act that requires US-listed extractive companies to report all payments made to governments anywhere in the world to the Securities and Exchange Commission. Press reports suggest the EU is likely to adopt a similar measure.*

Jupiter has publically supported the objectives of the EITI since 2004. As an investor with exposure to companies operating globally, we believe it is in the interest of those companies to operate in a business environment that is characterised by stability, transparency and respect for the rule of law. These factors are essential to securing economic prosperity and social cohesion, which, in turn, enable the companies in which we invest to prosper.

*Financial Times, March 3rd 2011. EU closer to US-style financial reform

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'We'll go the distance'
Jupiter has reconfirmed its intention of engaging actively with companies to improve their long-term performance in its formal response to the Financial Reporting Council's recently introduced Stewardship Code. The response highlights our commitment to engaging and voting, where appropriate, on issues affecting the long-term value of a company. This in turn should help deliver long-term performance for our investors.

As noted in our response, issues affecting companies may include, but are not limited to: business strategy, acquisitions and disposals, capital raisings and financing operations, internal controls, risk management, board succession, shareholder rights and remuneration. Equally, we ask companies to present us with their plans for maintaining social and environmental sustainability within their businesses.

A growing body of support (both within and beyond Jupiter) recognises the value of focusing on long-term performance, or 'going the distance', for the sake of generating more stable, long-term investment returns. A notable advocate is Dominic Barton, the managing director of global consulting firm McKinsey. In a much-publicised article in the Harvard Business Review, Barton called for "a shift from what I call quarterly capitalism to what might be referred to as long-term capitalism."** From appropriate management incentive plans to environmental sustainability, we seek to draw on a wide range of indicators to identify those companies best-positioned to generate investor returns over the longer term.

** Harvard Business Review, March 2011: Capitalism for the Long-term

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A greener US economy?
By Emma Howard Boyd, Head of Sustainable Investment and Governance

At the end of March, I had the privilege of joining Minister of State Gregory Barker and a selection of UK businesses on what was described as the first green trade and policy mission to the US.

As well as meeting with companies involved in the green and sustainability arena, an objective of the trip was to meet with policymakers to demonstrate that implementing policies to support green growth can help secure sustainable economic growth.

What was evident was the impact of the economic downturn and the swing back towards the Republicans in last year's midterm election on policy and investment priorities in the green economy. The federal government is struggling with low-carbon and clean energy policies and many states are now at risk of backpedalling on climate and clean energy as they face mounting budget deficits and pressure to grow their economies.

However, with gasoline prices approaching the $4 per gallon mark for the first time since July 2008, energy policy is again rising up the political agenda in Washington. During the trip, President Obama delivered a speech on America's Energy Security, launching a Blueprint for a Secure Energy Future. This outlined a comprehensive national energy policy aimed at developing and securing America's energy supplies, providing customers with choices to reduce costs and save energy, and promoting innovation to create a clean energy future.

In his speech, Obama referred to the introduction of a Clean Energy Standard, which aims for 80 per cent of the country's electricity to be sourced from clean energy by 2035. Notably, he emphasised the potential for job creation and the emergence of new industries marking how the climate change debate in the US has shifted focus to energy security and economic prosperity.

We met with a wide range of businesses and were particularly impressed by how some of the largest US companies are recognising the threats and opportunities posed by climate change. Bank of America, for example, is planning a $20 billion business initiative to address climate change through its products, services and operations. Meanwhile, the American Energy Innovation Council, which includes Bill Gates and Jeff Immelt, is one of several corporate level groups putting pressure on governments on the issues of climate change and sustainable development.

A particular highlight of the trip was a visit to the Philadelphia Navy Yard which has become a Clean Energy Hub for the Delaware Valley region. During our visit, we met representatives from regional businesses and the newly formed Greater Philadelphia Innovation Cluster (a consortium of universities and businesses that obtained a $160 million DOE grant to perform research on building energy efficiency). Overall, what struck me about the Navy Yard was the energy and dedication of the people we met. The Yard is a real symbol of the ongoing commitment to clean tech innovation in Pennsylvania despite policy uncertainty at the state government level following the recent election of a coal-friendly Republican Governor.

Overall, the trip provided an interesting insight into the future of the green economy in the US. The political rhetoric has shifted away from the science of climate change towards the mechanics of economic recovery and energy security and it is on this platform that future policy decisions are likely to be based. While strong policies are necessary to support corporate growth in this area, based on the business leaders I met, there are clear signs for optimism about the potential longer-term shift towards a greener US economy.

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