Celebrating five years of Positive Impact

This month we publish our first five-year review of the Positive Impact Portfolios, taking an overall look at their achievements in delivering social, environmental and financial returns.

Facebooktwittergoogle_pluslinkedinmailFacebooktwittergoogle_pluslinkedinmail   by Damien Lardoux, 26th October 2017

The Positive Impact Portfolios have attracted more than £40 million in assets under management since launch. This growth has come from significant performance gains as well as capital inflows – we are pleased to say that the portfolios have beaten their benchmark for five consecutive years.

Impact investing is an evolving field, and we are constantly seeking to improve our own methodology for screening and selecting impact funds. The latest development in our own approach has been to adopt the UN Sustainable Development Goals as a framework for identifying and reporting on impact. The Goals shine a spotlight on some of the world’s biggest challenges and provide focus and clarity on what is required to meet them. They represent a huge opportunity for forward-looking and innovative companies – just the type we want to capture within the portfolios.

In the review, we show how the products and services of companies within the portfolios align with the 17 Goals, and provide a range of examples to show how progress is being made.

We have also started to aggregate company data across all of our holdings. While findings here are preliminary we have encouraging data to share in relation to three themes: growth, climate change and innovation.

On average, companies in our Balanced portfolio have 39.4% more employees than they did in 2012 (an annualised growth rate of 8.7% per year). Growing numbers of employees points to healthy levels of job creation.

In terms of climate change, based on available data our Balanced portfolio also emitted 62 tonnes of CO2 less than the FTSE 100 Index per £1 million invested. Our companies also sourced on average a significantly higher proportion of their energy from renewables.

Innovation is required to make progress on many of the Goals. Companies within the Positive Impact Portfolios have invested heavily in research and development, increasing their average spend by 37.4% since 2012. This compares to virtually no change in average spend for the FTSE 100 companies. Our portfolio companies are also spending consistently more as a proportion of revenues than companies in the FTSE 100 (4.3% versus 2.8% on average).

We are encouraged by these preliminary findings and our work on impact investing has earned us a Best for the World award – ranking us in the top 10% of B Corporations worldwide for our customer offering.

About the author: Damien Lardoux

Damien has an MSc in Management from Reims Management School and an MSc in Wealth and Asset Management from ESCP-EAP Paris Business School. He is also a CFA charter holder, being a regular member of the CFA Institute and CFA UK society.

Before joining EQ Investors, Damien worked for Bank of America Merrill Lynch being responsible for asset allocation, security selection and portfolio construction. Damien now acts as the portfolio manager for the EQ Investors Balanced, Positive Impact and Multi Index portfolios. He also co-chairs our Fund Selection Committee.

Damien is a devoted sportsman, playing judo and squash on a regular basis. He also enjoys hiking, to very far places such as the Himalayas and Kilimanjaro.

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