Invest with impact

Overview

To holistically support an impact enterprise’s enduring success, we believe impact investing in public equities should be built on three interconnected pillars:

1. additionality through the investor’s contribution;
2. additionality through the investee (the company); and
3. additionality through the asset class.

Definition of impact investing

Impact investments are investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return. The practice of impact investing is further defined by core characteristics: intentionality; use of evidence and impact data in investment design; management of impact performance; contribution to the growth of the industry.

Contribution from the investor

Impact investors, with their natural long-term horizon, can afford an impact company the benefit of focusing on its long-term goals. Additionally, impact investors offer a more responsible exit from private investment for impact companies through patient capital and a long-term partnership. Furthermore, investors can create impact by participating in capital raises which provide additionality to the impact company. Finally, investors can engage with companies on impact progress, and increase attention to often overlooked impact enterprises.

Contribution from the company

A business qualifies as impact only if it meets the criteria of materiality and additionality. We typically define materiality as having greater than 50% of a company’s revenues from products and services helping to solve a major social or environmental problem. To meet the additionality criterion, a company’s products or services must address a need that is unlikely to be fulfilled by others (such as competitors or governments).

Contribution at the asset class level

Quite simply, the global need for impact capital is an order of magnitude greater than what could conceivably be provided by the private markets. For developing markets alone, we face a shortfall of approximately US$2.5 trillion annually to meet the SDGs by 2030.¹ Given the magnitude of the need and the extraordinary opportunity, we must find ways for public markets to scale impact investing with integrity. By offering impact investing through public equities, a broad new cohort of investors can participate and provide much needed capital.