This week we attended the EQ Investors’ event – Have you thought about Impact Investing? The discussion was lead by Damien Lardoux, Portfolio Manager at EQ Investors, who was joined by:
- Tim Crockford, manager of the Hermes Impact Opportunity Fund; and
- Julien Bras, co-manager of the Allianz Green Bond Fund.
The event revolved around impact investing in relation to the United Nations’ Sustainable Development Goals, launched following the 2015 Paris Summit. The 17 Goals address the global issues that need to be met by 2030.
We spoke with Damien after the event to give us his thoughts on why the adviser market needs to take the lead on initiating these conversations with clients.
EQ Investors have been focusing on Impact investing since 2008 and have recently launched their Impact Calculator. This nifty tool reengineers how ESG investments can be reported on, not just from a returns point of view, but the direct impact your clients can make to the environment and society.
Head on over to eqinvestors.co.uk/impact-calculator to see what impact your clients could make.
Here are our top three takeaways from the event:
Investing in the right companies
EQ Investors as well as Hermes and Allianz are backing sometimes small but sensible companies whose core mission is to contribute to one or more of the SDG’s. Lots of work is being done by dedication teams to ensure the companies they are recommending are meeting one or more of the requirements. They also look across the whole value chain of a product or service to find investment opportunities.
In addition, they support companies who are working towards changing their business model to be more sustainable. They also take care to ensure they don’t invest in companies who reverse their transition in a sustainable business model.
For example, companies like Ørsted, the Danish energy company, who transformed their business from oil and gas to wind energy. Brambles, a logistics company whose circular ‘share and reuse’ business are leading the way in showing companies can make big returns while meeting the SDG’s.
Impact vs. returns
Clients don’t need to compromise their returns when investing in companies who are making a positive contribution. You can have a positive impact and get a financial return, in some cases actually outperform traditional investments. This is because when companies are meeting one or more SDG’s ‘the world wins’.
The industry needs to change within
The financial industry needs to change. People want to invest, but they aren’t being given the opportunity to do so. Half of British people say they want to invest ethically, yet two-thirds of the population said they are never asked about it. And fewer than 10% of Financial Advisers are directly discussing impact investments with their clients.
We need to keep the the impact investment movement – and it’s up to Financial Advisers to start the conversation with their clients.
EQ investors are on a journey and need your feedback on how clients are reacting to impact investing.