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Impact Investing Whitepaper Impact Investing Whitepaper In partnership with Clear and Independent Institutional Investment Contents Analysis We provide institutional investors, including pension funds, 03 Introduction insurance companies and consultants, with data and analysis to assess, research and report on their investments. We are 04 Impact Investing Roundtable committed to fostering and nurturing strong, productive Welcome to CAMRADATA’s Impact Investing relationships across the institutional investment sector and are 09 Roundtable Participants Whitepaper continually innovating new solutions to meet the industry’s complex needs. 15 Arisaig Partners: Capturing The Rise Of Emerging Markets We enable institutional investors, including pension funds, Climate change is increasingly at the forefront of the global agenda, with a key focus insurance companies and consultants, to conduct rigorous, 18 Mackenzie Investments: To maximize on a ‘just’ transition to a net zero economy. Impact investing is set to play a crucial evidence-based assessments of more than 5,000 investment your energy transition exposure, think role if targets are to be met. products offered by over 700 asset managers. thematic Impact investors are vital in allocating capital in order to address the abundance of Additionally, our software solutions enable insurance 23 M&G Investments: Targeting solutions social and environmental issues facing the planet. companies to produce consistent accounting, regulatory and for the planet through impact Even as governments and corporations alike are ramping up their climate audit-ready reports. investing commitments, there is much work to be done. Time is running out for climate and social goals to be met. According to a recent To discuss your requirements study by the Rainforest Action Network, in the five years since the Paris Agreement, +44 (0)20 3327 5600 the world’s biggest banks – including the likes of BNP Paribas, Goldman Sachs, and [email protected] JP Morgan – have financed fossil fuels to the tune of $3.8 trillion (€3.2 trillion). Find us at camradata.com Climate rhetoric and reality are still far apart, but headway is being made. In this roundtable, we will discuss how impact investors are investing for a better world, what challenges they face, and where their capital is needed the most. Join us on LinkedIn Follow us on Twitter @camradata © Copyright CAMRADATA Analytical Services July 2021. This marketing document has been prepared by CAMRADATA Analytical Services Limited (‘CAMRADATA’), a company registered in England & Wales with registration number 06651543. This document has been prepared for marketing purposes only. It contains expressions of opinion which cannot be taken as fact. CAMRADATA is not authorised by the Financial Conduct Authority under the Financial Services and Markets Act 2000.CAMRADATA Analytical Services and its logo are proprietary trade- marks of CAMRADATA and are registered in the United Kingdom. Unauthorized copying of this document is prohibited. 3 Impact Investing Roundtable The CAMRADATA Redefining Impact Investing Roundtable took place virtually in London on 13 May 2021. “ Baird noted the difficulty of meaningful engagement with publicly-quoted companies as a secondary investor, where you have limited influence and recourse.” engagement effectively on Climate Olsen agreed. His final universe of Change. “Engagement is key,” he world-changers is small, although On climate mitigation, he picked said. On behalf of clients, Stanhope it remains diverse and expanding, out Argentine agritech firm, analyses companies in both public including the likes of DS Smith in Bioceres, which develops soy The CAMRADATA Impact Investing “ Until a few years ago, the biggest impact we had and private markets in terms of the packaging - “one of the largest beans that are drought-resistant. Roundtable 2021 began with the “purity” of their impact. paper recyclers in the world” - to For Mackenzie Greenchip, Cook fundamental question of whether was helping major Canadian institutional investors Tom Baird leads private and Danish wind energy giant, Ørsted, reckoned its original universe minority shareholders in major change their perception of impact” public equity manager research to companies erecting mobile had been 1,000 stocks, of which quoted companies can make an focusing on impact at Redington, phone towers in Africa. 100 had since been taken out impact. listed companies in developing founders realised that smaller local a consultancy to institutional Lanning reckoned there were and 100 had gone bankrupt. He John William Olsen, manager of markets, said the most compelling firms did not have the reach and investors. He told the CAMRADATA 28,000 companies in Emerging noted that opportunities were M&G’s Positive Impact fund said he argument for his strategy is scale. were less bankable to address the panel that it was possible to do Markets; but after getting down not all cleantech ‘glamour’ stocks believed companies do prize the “Our reach is much greater because scale of climate challenges. “Until a impact in public markets but to those potentially suitable in but some very old, traditional capital base and liquidity they get the target population is much few years ago, the biggest impact the perception is that private terms of high quality, low cyclicality manufacturers. “We would have from minority investors. But Olsen larger,” he noted. He contrasted we had was helping major Canadian markets are easier. “They are the and benefiting from sustainable invertor companies like SolarEdge reckoned the main impact is by the undersupply of services institutional investors change their first port of call because private domestic demand growth, less and Enphase telling us about choosing to invest in companies such as education and water in perception of impact,” he said. markets resemble project finance than one thousand were left. their power electronic supply driving solutions for the world’s developing countries with the kind “The local private equity investors [the original impact investment “That’s a good enough starting- issues, which led us to look more biggest problems. His team at M&G of additionality stocks in developed might have allocated 3% of their format],” he said. For its clients, point,” he declared, explaining closely at companies like Kamet follows the Impact Management markets offer. “The largest public total assets to impact, but the world Redington first started impact that Arisaig saw three drivers for based in Florida, or AVX, that had Project’s methodology for dividing companies equate with the richest needed them to engage a larger investing in private market sectors expansion in that number: growth existed for decades manufacturing the universe of public companies markets,” said Lanning. “On that portion of the other 97%.” such as renewable energy. Baird in affordable healthcare provision, capacitors but were now finding into three categories: A, B and C. metric, you could argue that Tesla Lydia Guett, an investment noted the difficulty of meaningful digitalisation and climate-change new markets for their traditional These range from Avoiding harm is probably the biggest company director with investment firm, engagement with publicly-quoted mitigation. power components.” He told (A) to Benefiting stakeholders (B) tackling climate change. But buying Cambridge Associates, said that companies as a secondary All three drivers disrupt the a similar story of the supply/ Contributing to world-changing Tesla is not the most direct way to investing just to earn dividends was investor, where you have limited traditional composition of demand imbalances in power positive solutions (C). Olsen said: address this issue.” not impactful. But she said that influence and recourse. developing markets, especially in management microchips. He “We aim to have a C impact element John Cook, co-manager of the activists such as certain large hedge Nevertheless, Baird recognised Frontier economies, where banks, mentioned packaging companies in our holdings.” Mackenzie Greenchip Global Equity funds can drive the agenda, even that more people are attempting extractives and state-owned like Cascades, DS Smith and Mondi, What about turning the “Bs” or strategy, said the firm began in at the biggest corporations; and impact in public equity while enterprises tend to dominate. that were all finding increased even the “As” into impactful? “That Canada fifteen years ago. It was shareholder resolutions can put maintaining a broad opportunity “Digitalisation is making financial demand for their products is tricky,” admitted Olsen. “I wouldn’t spun out of an environmental pressure on management. set. He said it was a tough balance, services and education efficiently based on the amount of recycled take that on myself.” private equity firm. Cook told the For Stanhope Capital, a wealth estimating that filtering in “real scaleable without compromise of materials they were using. David Lanning, head of strategy CAMRADATA panel that it wanted management group, Harry Cooke impact” companies reduced the quality,” Lanning said. “Perhaps in- Shape Changing for the Arisaig Next Generation to change the focus of larger listed noted that alliances such as universe very quickly. person education remains better Olsen said that impact investing fund, which concentrates on companies because the firm’s CA100+ organised collaborative than online but the gap is closing.” in public equities was still finding 4 5 Cooke then was asked whether however, the difficulty
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