Impax Asset Management is a U.K.-based global stock investment manager making a worldwide difference for the environment. In 2016, Portico made a $20 million social impact first (SIF) investment in an Impax environment-focused strategy. Annually, Impax reports on the positive environmental impact created by Portico’s Impax portfolio, and Portico passes this information on to its members.
“The impact information provided by Impax is part of the return on investment for Portico members who, in 2021, were invested in the Portico Social Purpose Target Date Funds (TDFs), Portico Global Stock Social Purpose Fund, or the Portico Non-U.S. Social Purpose Fund” said Erin Ripperger, Portico’s manager of socially responsible investing and investor advocacy. “This information allows them to celebrate the many ways their investment had positive impact on the environment.”
Impax targets companies expected to flourish as the global economy transitions to a more sustainable model — and reduces or eliminates exposure to companies likely to lose from that transition. Specifically, it invests in companies pursuing positive environmental strategies with measurable outcomes, including wind farms, solar technology, and wastewater-reduction and -treatment techniques.
Measurable Impact in 2021
After lower-than-usual impact reported for 2020, the first year of the pandemic, Impax reported significantly stronger results for 2021. “We’re thrilled to see impact numbers strengthen,” said Ripperger, “across all four of our impact measures — net CO2 emissions avoided; renewable energy generated; water treated, saved, or provided; and waste materials recovered or recycled.”
Worth noting: Impact data is always subject to what portfolio companies can provide. While measurement and disclosure are improving, impact measurement is an evolving discipline. For this reason, Impax strives to strengthen the breadth and depth of impact reporting over time — through proprietary research and by encouraging the companies it invests in to improve their disclosure on sustainability metrics.
What is Social Impact First (SIF) Investing?
To help achieve measurable social impact, 14 of Portico’s 15 social purpose funds employ a form of positive social investing called social impact first (SIF) on up to 10% of fund assets (excluding the Portico Stock Index Social Purpose Fund). SIF investments accept a somewhat lower projected return and/or somewhat higher projected risk on up to 10% of the fund’s investments in order to invest in companies and organizations that support initiatives like affordable housing, reduced greenhouse emissions, and renewable energy — priorities that align with ELCA social teachings and policies.
“It’s been a Portico objective since 2015 to carefully and steadily increase the number of SIF investments made through our social purpose funds,” Ripperger said. “In 2021, we successfully achieved a balanced portfolio of SIF investments that comes close to the maximum allowed in the social purpose funds. We make these investments with the intent to create solid financial returns for member investors and positive social outcomes important to member investors and the ELCA.”
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