Damian Lardoux, Portfolio Manager at EQ Investors actively selects funds for the EQ Positive Impact Portfolios. The portfolios aim to make a positive impact on society and the environment through their investments. The latest quarterly update features companies that the funds invest in, showcasing their solutions to real world problems.
Since 2017, EQ have been using the United Nations’ sustainable Development Goals as a way to think about impact. The 17 goals shown below provide a holistic framework for action around the most critical issues for society and for our planet. The underlying holdings in the portfolios are mapped to these goals and the latest update focuses on three examples for Goals 8 – Decent Work and Economic Growth; 9 – Industry, Innovation and infrastructure and 10 – Reduced Inequalities.
Goal 8 – Decent work and economic growth
Supporting micro, small and medium enterprises in Indonesia:
Indonesia has the largest economy in South East Asia and the sixteenth largest economy in the world by nominal GDP, expected to grow by 41.9% over the coming 5 years. To realise this potential, micro, small and medium enterprises will play a pivotal role to promote growth, create jobs and alleviate poverty. Indeed micro, small and medium enterprises contribute 57% to the country’s GDP and employ 89% of the private workforce. However, the small and medium enterprises sector is underbanked and characterised by a low level of debt in comparison to larger companies, partly due to demand not being met by financial institutions.
The fund in focus which is mapped to this goal is the Hermes Impact Opportunities Equity fund and an example holding is Bank Rakyat Indonesia (BRI) which focuses on providing financial services to the community and micro, small and medium enterprises to address issues of financial inclusion and access to credit.
Goal 9 – Industry, innovation and infrastructure
Connecting renewable energy production to the grid
By 2040, Bloomberg New Energy Finance expect that 72% of new energy capacity and more than 35% of global electricity generation will come from renewables, up from 5% today. However, developing renewable resources presents a new set of technological challenges not previously faced by the grid. Indeed, location of renewable resources usually far from population centres and the variability of renewable generation mean that long distance transmission is crucial to regional and local excesses or deficit.
The fund in focus which is mapped to this goal is Liontrust Sustainable Future European Growth and an example holding is the Prysmian Group, a world leader in subsea energy cables and has developed solutions that help energy to be transmitted across land and under seas.
Goal 10 – Reduced inequalities
Mobility for disabled people
6.8 million people in the UK are affected by physical impairments to their mobility, the most common impairment for disabled people.
Unfortunately, the need for basics like mobility aids, care and transport means that disables people’s day to day living costs are 25% higher than those of non-disabled people. But despite having higher living costs, disabled people are far less likely to be employed than non-disabled people: fewer than 50% of working-age disabled people are in work, compared to 75% of non-disabled people.
Affordable solutions to improve mobility of disabled people are essential to help them access work opportunities.
The fund in focus which is mapped to this goal is the Threadneedle UK Social Bond and an example holding is Motability Operations which is a national charity set up with all-parliamentary support in 1977 to help disabled people with their personal mobility.
In the EQ Investors Spring update, you can read more about the three funds in focus the example holdings and for more information about the services from EQ investors and the Positive Impact Portfolios, head over to their dedicated page on the Discus website.