There were pretty much two categories of investors the last 10-15 years - those that owned Apple, and those that did not.  Did you?  Did environmental and social issues point you away from Apple or did they bring you to the conclusion that Apple was the best investment idea of its time?  

Since Apple first went public, its stock has risen many thousands of percent in value, but most of its rise occurred a few years after Steve Jobs rejoined the company.


 Over the past ten years, Apple is up +1184.69% versus the S&P 500 +70.26%, which is why its easy to say if you were in you did great, and if not, well, not so much.

Founded by Steve Jobs and Steve Wozniak, along with the less known Ronald Wayne back in 1976 to create and sell computer kits at a time well before everyone owned a PC, Wayne sold his stake in the company for $800.  This explains why no one has heard of him, whole the other two are basically now household names.  Visionaries ahead of their time who create what people both want and need become legends and drive financial success, and it was of course Jobs and his vision and drive which eventually led to the company becoming a financial leader.  

Financially, going back in time, Apple sold pre-IPO shares of the company to Xerox in 1979 at $10/share and went public for $22/share towards the end of 1980 (or $4.11 in today's post 5-1 stock split terms).   Known in the 1980's as a quirky manufacturer of PCs ,the company did not wildly succeed, in fact Jobs left only to return when the company reached a low in the late 90s which it didn't quite know what to do about, as the internet age took hold, and the average person had an America Online account and an IBM desktop computer at home, using Microsoft operating software.

Between 2003 and 2006, Apple's stock price finally started rising dramatically, on the back of using design elements and selling gadgets that captured the public's imagination.  Jobs was relentless in pursuing this vision, and understanding the combination of future revenue that came from the quality of individuals residing in the C-Suite combined with successful execution led to the financial success that the company and its shareholders went on to enjoy to this day.

Yet from an ESGFQ (environmental, social, governance, financial, quality) perspective, the company was long not considered a darling.  From an environmental perspective, even in 2014, some look at Apple as a non discloser of ESG data and shy away even while their brand is considered the most valuable of any company.  Apple has resisted reporting at times because they in my view correctly pointed out that most of their environmental footprint occurred in the use of their products by consumers, and so they did their own reporting on that basis at their website.  Their reporting was actually quite good and thoughtful, but this clearly did not satisfy everyone.  Apple has also long had a focus on making their devices more energy efficient.  They have actually been a leader from a social perspective regarding their Asia-based facilities, much as perception has suggested otherwise. Meaning that it is important to get to know the company and what it is really doing.  Proper due diligence was in order and would have led to an understanding that Apple was actually ahead of its peers on this issue and remains so.

Further, from an ESG concern perspective, pressures on the company guaranteed that they would continue to work on their problems.  CalPERS one of the largest owners of Apple considers itself a strategic partner in the company, working with Apple to better understand and improve their strategies on ESG.  This approach has been very beneficial for the company and the pension fund and its beneficiaries.  CalPERS is also a leader in corporate governance.  Apple's score on this might have been average or risky three years ago per GMI but that's not cause to sell, it was a cause for CalPERS and others to engage with the company to make sure it was doing the right thing.

Greenpeace also has worked closely with Apple, after first ranking the company on their own energy use publicly, to help them maximize use of renewable energy and in which the company is now a world leader.  Apple's head of sustainability is now former EPA head Lisa Jackson, with the company focused on climate change, toxins and resource constraints.  Tim Cook is outspoken on the need for climate change action, recently going as far as  telling climate change deniers to sell the company's stock.

Basically, Apple was guaranteed to have to listen to the environmental and social concerns of the company's customers.  They have taken the time to identify their biggest risk issues and are at work turning them into opportunities. 

Back in 2009, when our sustainable investing class created its first portfolio, this was the premise, that Apple had trustworthy leadership, they figured to be working on their ESG problems while selling people what they wanted to buy, while also driving innovation, our formula for sustainable investing exactly,  It may have been our favorite stock at the time, and at $190 a share it proved to be a very good investment to this day, making its holders many times their original investment, even over the past 5 years.

There really were two types of investors in the recent past.  Those who recognized the need for market innovation and got on board and succeeded financially, and those who did not, perhaps sticking with older ways of thinking.  Our premise of sustainable investing is that this same approach that has worked so well the last 510 years is exactly what is needed going forward as well.  

Will Apple continue to outperform?  That is less clear.  The company is clearly in its third era now.  

Its first era was not successful, its second was a period of success that will go down in history. The next period of time will have opportunities and risks, but I wouldn't bet against Apple coming up with the next big thing.  In fact, when our latest class at Columbia University just created our most recent portfolio, we chose both Apple (APPL) and Google (GOOG).  We will next build portfolios as as class in January 2015.  Less than two years ago, this class selected Tesla (TSLA) at $45/share, and it is now $225.

Sustainable Investing overweights technology and innovation (which has led to outperformance the last 10 years), looking for strong organizational cultures (such as Apple) and for risks which companies cannot overcome (such as coal, which has seen its financial situation collapse).

FInancial success has been driven by positive sustainable investing performed in this manner and figures to only get more significant in importance given global trends.  If you are not at least diversified in this manner, you may get left behind.  Or as with Apple, Google and Tesla, leaders and laggards quickly separate themselves based on your getting on board with the winners of tomorrow or not.