October 19, 2021

Impax Reports Positive Environmental Impact for 2020

Portico’s investment team made a $20 million social impact first (SIF) investment in an Impax environment-focused strategy in 2016. The information below paints a picture of the positive environmental impact created by this investment during 2020.

Impax Asset Management is a U.K.-based global stock investment manager making a worldwide difference for the environment. It invests in companies pursuing positive environmental strategies with measurable outcomes, including wind farms, solar technology, and wastewater-reduction and -treatment techniques. Impax expects these companies to flourish as the global economy transitions to a more sustainable model.

“This impact report is part of the return on investment for members who, in 2020, were invested in the ELCA Social Purpose Balanced Funds, or the Portico social purpose target date funds (TDFs) which replaced them in October 2020,*” said Erin Ripperger, Portico’s senior socially responsible investment analyst. “This annual report is their opportunity to celebrate the many ways their investment had positive impact on the environment.”

Measurable Impact

The year 2020 was atypical, largely due to COVID-19. Not surprisingly, positive impact measures were down compared to 2019 across three of the four types of measures Impax reports:

  • Net CO2 emissions impact (emissions emitted minus avoided)
  • Renewable electricity generated
  • Water treated, saved, and provided
  • Materials recovered and waste treated

“Given last year’s market volatility and economic disruption,” said Ripperger, “we’re satisfied with Impax’s impact performance. And we’re pleased to see that our current mix of portfolio investments resulted in a strong increase over last year in impact related to the treatment, preservation, and delivery of clean water.”

Interestingly, net CO2 emission avoidance declined, in part, because more companies are sharing enhanced reports that include indirect (full value chain) emissions. While this more rigorous reporting represents a positive trend, it can lower the portfolio’s emissions avoidance metrics.

2020 Impact of Portico's Impax Investment

Based on annual environmental data most recently reported by Impax for holdings as of Dec. 31, 2020. Impact methodology based on equity value.

 

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.

“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. “We make these investments to create solid financial returns for member investors and positive social outcomes important to member investors and the ELCA.”

For more information about all funds managed by Portico Benefit Services, please see the Investment Fund Descriptions.


* The ELCA social purpose balanced funds were replaced by Portico social purpose target date funds (TDFs) in October 2020. Because these target date funds were created from Portico’s existing investment pools, all social purpose TDF investors remain participants in this Impax investment.

Information regarding Portico funds should not be considered as advice or as a recommendation to hold, purchase, or sell those financial products and does not take into account your particular investment objectives, financial situation, or needs. For more information about all funds managed by Portico Benefit Services, please see the Investment Fund Descriptions for your retirement plan on the Fund Performance page of myPortico and speak with your tax, legal, or financial professional.

Members should carefully consider the target asset allocations, investment objectives, risks, charges, and expenses of any fund before investing in it. All funds, including the Portico funds, are subject to risk and uncertainty. Past performance is no guarantee of future performance. Funds managed by Portico Benefit Services, including the Portico funds and ELCA Participating Annuity Investment Fund, are not insured or guaranteed by the Federal Deposit Insurance Corporation, any other government agency, or the ELCA. Fund assets are invested in multiple sectors of the market. Sectors, like funds, may perform below expectations and lose money over short or extended periods. Review the Portico Investment Fund Descriptions and the Investment Memorandum for the ELCA Participating Annuity Trust for more information about the Portico funds.

Target date funds are designed for members expecting to retire around the year indicated in each fund’s name. When choosing a fund, members should consider whether they anticipate retiring significantly earlier or later than age 65 and select the target date fund that aligns with their expected retirement age. There are many considerations relevant to fund selection; members should choose the fund that best meets their individual circumstances and investment goals. Each fund’s asset allocation strategy becomes increasingly more conservative as it approaches the target date and beyond. Each fund’s investment risk changes over time as its asset allocation changes. The investment process used by the investment managers and the target asset allocation of the funds may change at any time, without notice.

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