Neuberger Berman Sustainable Investing Challenge

Neuberger Berman is proud to launch the 2024 Sustainable Investing Challenge for the sixth year in a row in conjunction with the Baruch College Zicklin School of Business, Columbia Business School, Harvard Business School, Kellogg School of Management, The London Business School, NYU Stern School of Business, and the Wharton School of the University of Pennsylvania.

The Challenge

2024’s Theme is Circular Economy

Students will work with mentors to identify publicly listed equity investments whose business objectives are aligned with the sustainability theme and are expected to generate positive financial performance (as a dual objective). After an initial round of eliminations, finalists will present virtually to a panel of Neuberger Berman judges who will select the winning team(s), which will receive a financial prize from Neuberger Berman.

Neuberger Berman

Founded in 1939, Neuberger Berman is a private, 100% independent, employee-owned investment manager. From offices in 39 cities worldwide, the firm manages a range of strategies, including equity, fixed income, quantitative and multi-asset class, private equity and hedge funds on behalf of institutions, advisors and individual investors globally. With 753 investment professionals and 2,846 employees, Neuberger Berman has built a diverse team of individuals united in their commitment to delivering compelling investment results for our clients over the long term. That commitment includes active consideration of environmental, social and governance factors. As an active manager, Neuberger Berman has a long-standing belief that material environmental, social and governance factors are an important driver of long-term investment returns from both an opportunity and a risk mitigation perspective. We also understand that for many of our clients the impact of their portfolio is an important consideration in conjunction with investment performance.

ESG Investing at Neuberger Berman

2023 Stewardship & Sustainability Report

Key Dates

Virtual Kick-Off

September 20, 2024

Team Registration Date

October 4, 2024

Speaker Session

October 8, 2024

Submission Due

November 17, 2024

Finalists Announced

November 22, 2024

Virtual Final Judging Panel

Early December

Why Participate?

Through the Neuberger Berman Sustainable Investing Challenge, students will study a sustainability theme and learn how to invest for sustainable and impact portfolios. Neuberger Berman also views the Challenge as an avenue through which exceptional candidates can be identified for internship and full-time positions.

“It is an honor to be entrusted with the precious capital of clients from around the world. Our clients have diverse portfolio objectives—from managing material financial risks, to seeking specific environmental or social outcomes. Some wish to align their portfolio with the net-zero transition or to invest in companies that help save lives. We are committed to offering clients the choice for how they wish their capital to be invested.”

~ Jonathan Bailey, Global Head of ESG (Environmental, Social, and Governance) and Impact Investing

2024 Theme: Circular Economy

This year, we are excited to center our theme on Circular Economy, an economic model designed to minimize waste and optimize resource use. Unlike the traditional linear economy which follows a “take-make-dispose” pattern, the circular economy model emphasizes extending and closing the loop of product lifecycles.

We see an increasing set of investable opportunities within circular business practices. In recent years, geopolitical conflicts, inflationary pressures, supply chain instability, and climate change have contributed to greater scrutiny of global material stocks and flows. Formalization of regulations and increasing policy actions supporting circular economy, such as Europe’s Circular Economy Package, China’s Green Consumption Plan, and the US Inflation Reduction Act of 2022, will drive corporate commitments to circularity and spur investments in enabling technologies. Circular strategies help companies increase throughput, contain input costs, and enable business model flexibility and demand resiliency throughout the economic cycle, which may lead to better long-term returns.

We also believe in Circular Economy’s potential to accelerate sustainable outcomes. Circular Economy can be a positive enabler for several of the UN Sustainable Development Goals (SDGs), especially responsible consumption and production (SDG 12), affordable and clean energy (SDG 7), decent work and economic growth (SDG 8), sustainable cities and communities (SDG 11), and climate action (SDG 13). Companies can employ various circularity strategies across various stages of their operations to not only generate competitive advantages and improve profitability, but also reduce environmental impact, promote social benefits, and drive innovation. Over the next few years, we expect businesses that adopt circular strategies to be well-positioned in the increasingly complex global operating environment.

Select circular economy characteristics:

Offering Innovative Solutions or Products: Companies that provide new solutions directly aimed at solving inefficient material use and pollution (e.g. novel recycling processes, retrofits to reduce energy and water use)
Enabling Efficient Consumption via Business Models: Companies that facilitate efficient or more responsible consumption via innovative business models (e.g. digital alternatives, sharing economy)
Providing Alternatives to Non-Recyclable Materials: Companies that provide alternatives to materials that cannot be recycled (e.g. natural or plant-based circular alternatives to non-biodegradable products).
Adopting “Circular” Business Practices: Companies that are adopting circularity in their business operations (e.g. corporate commitments to reduce plastic waste generation)

Questions to consider:

In which industries is the circular economy being instituted, and what are key characteristics to enable the shift towards a circular economy?
What strategies are companies pursuing to improve circularity?
How do we think about the importance of circularity throughout the economic cycle?
Where are the biggest opportunities to build and expand the circular economy?

Insights and Sources

Company Name

Investment Year: OriginationDate

Sector: asset type

Fund: total-commitment

ExternalLinkText.com

Company Name

Investment Year: OriginationDate

Sector: asset type

Fund: total-commitment

ExternalLinkText.com

Company Name

Investment Year: OriginationDate

Sector: asset type

Fund: total-commitment

ExternalLinkText.com

Guidelines

Prize Pool

$10,000 to be split between teams at the judges’ discretion. Judges may award prizes to multiple teams.

Investment Universe

Investment ideas must be a public equity (long only) with a market cap of $1 billion or greater. Investments can be global.

Eligibility and Team Composition

Teams must consist of two to four members; at least 50% of the team must be first year full-time MBA students, and the other 50% can be second-year MBA students and other graduate students from the university. The team must appoint a team captain responsible for team organization and communications with competition organizer, mentors, and judges.

Deliverables

Each team must submit a maximum five-page investment pitch with up to five additional pages for appendix and supporting tables (10 pages total). In addition, each team must complete a mandatory mid-competition check-in with their assigned mentor, to be scheduled at their discretion. All ideas must be presented using original content.

Financial Objective

Investments must provide compelling financial upside.

Required Elements

Investment thesis, price target, including expected total return, relevant time frame and valuation methodology
Alignment with the Circular Economy theme. Identification of key metrics for measuring company’s success within the theme, any relevant engagement objectives with the company, and broader ESG considerations
Financial statements and forecasts
Assumptions and risk factors

Finals Presentation

Finalists will be notified by mid-November. Finalists must prepare a presentation for the judges that effectively communicates the investment and its satisfaction of the dual objective criteria. The presentation will be followed by Q&A from the judges.

Environmental, Social and Governance (ESG) Investing

Neuberger Berman believes ESG factors can be material to investment performance over the medium to long term from both a risk and opportunity perspective.

LEARN MORE

2023 Winning Team

Vertiv Team from the London Business School

Chen

Rachel

Ricardo

Zoey

FAQs

Investment Thesis

How important is the ESG score by well-known sources (e.g., Eikon) in the company screening process?

There is no ESG score or source that we require students to utilize as part of their ideation process

Is there any ESG specific framework or types of analysis that teams should use?

We encourage students to develop their own investment thesis and frame work to identify investment ideas

Are there any limitations to geographies? Should teams only focus on investment ideas in North America or the United States?

There are no geographic limitations, Investments can be global. Investment ideas must be a public equity (long only) with a market cap of $1 billion or greater

Submissions

Can I see an example of a submission from last year?

We are unable to show previous years' submissions, but teams are expected to communicate and work with their mentors who will provide guidance on their submission

Who should students send their submissions to?

Teams should submit to NeubergerBermanSustainableInvestingChallenge@nb.com

How are the stock pitches submitted?

Please email your pitch to NeubergerBermanSustainableInvestingChallenge@nb.com and save your file with this title: "Team#_Company Name_School Abbreviation" for example "Team 4_Apple_CBS". Include your name and team member names in the body of the email

Your submission should contain the following: 1. 5-page maximum investment pitch 2. Up to 5 additional pages for appendix and supporting tables (10 total pages) 3. PDF format

What time of day are the deadlines?

Deadlines should be assumed to be end of day Eastern time (for example, submissions this year are due November 17th, 2024 at 11:59pmET)

Will extensions to the submission deadline be provided upon request?

Given that teams have over a month to work on their submission, we will not be able to accommodate any extensions to the submission deadline

When can we start working on our submission after signing up? Do we have to wait to be assigned a mentor?

Students can begin working on their submission as soon as they can and do not have to wait to be assigned a mentor. We encourage teams to come to their first meeting with their mentor with a company they've selected and an outline of the submission

Teams and Registration

Can each school have multiple teams?

Yes. There are no limitations to how many teams from each school can participate

What is the required composition of teams? Can we have 2 first year MBA students on the team?

We require at least 50% of the team be first year MBA students. For example, you have a team of 4, you may have 2-4 first year MBA students as part of the team

Can we form a team with students from different school?

Yes as long as 50% of the team is first year MBA students

Can we substitute a member of our team?

Yes, we understand sometimes conflicts come up and if a team member needs to change, please let us know by emailing NeubergerBermanSustainableInvestingChallenge@nb.com

My team won! When can we expect to receive our prize?

Congratulations! Upon timely completion of necessary documents and forms, you can expect to receive your prize in 3-6 months following the challenge.

Mentors

When will a mentor be assigned?

We aim to have a mentor assigned soon after we have confirmed your teams registration. Please keep in mind, if we receive an overwhelming number of student teams, we need to allocate more mentors and this might take longer

Who initiates communication with the Neuberger Berman assigned mentor?

Student teams are responsible for reaching out to their assigned mentor. We have let all mentors know to expect an email from their assigned student team

How often should teams meet or hear from mentors?

We expect teams to meet an average of 3 times in total: once after being matched, once at the mid-point and once before submission, but the schedule should be flexible based on mentor's availability