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Investing for Social Impact >>

SIF Investment Yields Positive Returns, Net Reduction in CO2 Emissions

Portico invested $20 million with Impax Asset Management through several ELCA social purpose funds in 2016. In its year-end report, the investment manager shared good news — for our members and the environment.

September 2017

In Feb. 2016, Portico selected Impax Asset Management, a global stock investment manager, as its second social impact first (SIF) funds seek to maximize positive impact(SIF) investment. Specifically, Portico invested $20 million in Impax’s Resource Optimization strategy through six ELCA social purpose funds — Social Purpose (SP) Global Stock, SP US Stock, SP Non-US Stock, SP 40e Balanced, SP 60e Balanced, and SP 80e Balanced.

Good news: As of Sept. 2017, our $20 million investment has positive returns. And, according to Impax’s measurement methodology, our investment, as of Dec. 31, 2016, created significant positive environmental outcomes, including a net carbon reduction of 15,320 CO2 emissions. Simply said, the work done by the companies we invested in — after factoring in their own carbon footprints — avoided CO2 emissions by an amount equal to pulling nearly 7,000 cars off the road for one year.

The three investments most responsible for avoiding CO2 emissions were a manufacturer of equipment used in beverage container recycling, a company that generates renewable energy to displace coal use in China, and a company that provides market-leading LED lighting for use in challenging operating environments.

 

This chart describes the impact of about $24 million invested in the strategy for one year. Portico used the UK Green Investment Bank’s calculator to translate the impact into everyday equivalents (e.g., cars on the road, household energy use). Impact numbers are based on the most recently reported annual impact data for portfolio holdings as of Dec. 31, 2016. Methodology has been assured by Ernst & Young LLP. Impax Asset Management is an adviser to Portico Benefit Services.

Long-term Growth Coupled with Positive Environmental Impact
The Resource Optimization strategy’s investment objective is long-term growth, achieved by investing in markets that deliver cleaner or more efficient energy, water, and waste services. Its investments tend to be in companies providing environmental solutions like wind farms, solar technology, and wastewater-reduction and -treatment techniques.

Because this is a SIF investment, measuring positive social impact is also important. To this end, Impax measures the net environmental impact of its investments annually — specifically, net CO2 emissions avoided, megahertz of renewable energy generated, gallons of water provided/saved/treated, and US tons of materials recovered/waste treated.

“Portico members invested in any of the six ELCA social purpose funds holding Impax investments can feel a great deal of satisfaction,” says Erin Ripperger, Portico’s socially responsible investing and investor advocacy analyst. “Our goal with SIF is always to realize both solid financial return and positive environmental impact. In this case, our investment did just that.”

While SIF funds strive for greater, measurable social impact, the trade-off is a somewhat lower projected return and/or somewhat higher projected risk. Learn more about SIF investing.

Man working by wind turbine

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