An impact investing portfolio for small (income) investors in public equity suggesting impact sectors and checklists for sustainable best-in-class companies and investment products (etp's, funds) and impact.
Focus on income and value
Neutral investors profile (do the test at your bank)
Avoid currency risk
Invest in Public equity &
Spread over bonds, stock, index trackers or exchange traded
products and investmentfund.
Private equity is an option for small investors as lending money
through crowdfundingplatforms often comes with risk analyses
For impact Investing in the Netherlands. I suggest: Geldvoorelkaar,
Symbid, Crowdaboutnow, Oneplanetcrowd, Seeds, Share2start en
Wekomenerwel en Greencrowd: invest in solarpanels for buildings
with a societal purpose (schools, hospitals, government buildings).
Impact investing or mission related investing is:
Investing in activities with a social and / or environmental impact
and make a profit.
Impact Investing is -because it aims at making a profit-
'financially sustainable' and can -in time- (re)finance and scale
up social and or environmental impact weather they are doing
less harm or -preferably- doing better
The investment suggestions are often Dutch public equity or global etf's
Income and Work Domestic: Kempen SenSe Fund. Global: Oikocredit, Triodos
Fair Share Fund, ASN-Novib Microcredit Fund, FMO bonds, Incofin & Alterfin
(Access to) Financial services (Microfinance, -mortgages, -insurance, check
out financials investment policies!) Oikocredit, Triodos Fair Share Fund, ASN
-Novib Microcredit Fund, FMO bonds, Incofin & Alterfin (Belgium)...
(Access to affordable) Food (quantity & quality, LOHAS**) Triodos Sustainable
(Access to affordable clean) Water (conservation, filtering ... ) Water Indices
and etf's, ASN Milieu & Water Fonds, WaterschapsBank...
(Access to) Healthcare (affordable care, focus on fighting diseases in
developing countries and linked to poverty, orphandrugs...) Access2Medecine
Index, health etf 's, vaccinebonds...
Education (private education, vocational training, professionals education...)
Sustainable Forestry: etf 's, Triodos Groen Fond, specialised funds.
Sustainable property and affordable housing: energy & water saving,
sustainable construction / renovation, (health)care real estate ...) GRESB /
NAREIT index etf 's (Triodos Sustainable real Estate) investment Unibail –
Rodamco, ASR bonds, Triodos Groen Fonds ...
Energy: (Renewable, clean energy, energy saving ... ) IBRD and EIB bonds,
mutual funds, clean energy indices (beware of nuclear energy), etf's, Green
Energy Transition Scorecard gives insight in rapidly growing sectors/regions
Carbon emissions reduction: cleantech, greentech, (low(ering) emission
companies, the automotive industry through it's investments ...) Low Carbon etf
's, Mutual funds, Triodos Renewables Europe Fund. Recently issued the Toyota
Green Bond based on (stringent) Californian emission criteria.
(Access to) Internet (education, (net)works, information & transparancy,
(Access to) Mobile phone & payment services
Recycling & Environment (resource conservation, waste
management...) ASN Groenprojectenfonds , Triodos Groen Funds...
Raw materials that are essential for high-impact activities such as
rare metals for mobile telephony and IT...
Social enterprises FMO bonds (Development Cooperation), GIIRS, B Lab
Fair trade Triodos Sustainable Trade Fund
Emerging Markets etf's per continent (some U.S. $)
Low income regions ... FMO bonds (development cooperation)
Community development ... BNG Bonds and WaterschapsBank bonds (for
(Access to) Healthy lifestyle (sports & exercise, wellness, social networks ...)
(Access to) Culture and society (property) Triodos Cultuurfonds in the
Impact awareness in mission, vision, strategy, tactics preferably
with SMART policy plans.
Impact R&D: strategy and activity (internal and external);
Impact is part of the Investor relations communication;
CSR & ESG policy: accountability practice, performance transparency
and score (in its sector)?
ESG implementation in the supply chain?
Presence in sustainability Indices? (DJSI, Footsie4Good,
Vigeo/NYSE, Global Compact, other, ESG reports ...)
Presence in Sustainable, Responsible, Ethical Funds? (check at
www.sustainable-investment.org Stock database)
Doublecheck by googling the company name & accusation, allegation,
lawsuit, fine, conviction etc.
Benchmarks: CSR and/or ESG benchmarks, Carbon and/or Water
footprint. For the Netherlands www.transparantiebenchmark.nl, CO2
water etc. reduction, recycling standards, waste management...;
(Inter)National governments (policy, compliance, facilitation,
promotion); Robeco Country Sustainability ranking, SolAbility (S. Korea);
NGO's signals and response (human rights, labor conditions, local
communities, land grabbing, environment & biodiversity protection;
Stakeholders dialogue, theme's and response;
Impact return on investment
Financial return on investment
& private equity
The ultimate dilemma of the impact investor is that the impact of a
sustainable company's impact activity can turn out negatively when
compared to the effects of their business on a global scale. But when
multinationals go sustainable their/that impact can be enormous...
Example: The automobile industry is the biggest investor in clean
tech with it's investments in electric cars. Transport & traffic cause
23% of CO² emmissions and the emissions keep growing.
Example: Mars company helping poor cocoa farmers and supporting
a Symbioscience division for life science and mens health, but as it's
core business is manufacturing sweets adding to the worlds obesity
problems causing death, (chronic) disease and societal costs.
A smart investor spreads risks over funds and sectors which in my
opinion means chosing impact sectors and consequently their best-in-
class companies and index trackers or exchange traded funds (due
to the wide spread and the low costs). Etf's often list large cap
companies who are usually doing the most interesting things impactwise,
thus inspiring their competition to follow or even outperform them.
In an general sustainable etf or mutualfund the impact effects of
impactful companies can be undermined by the overall effect of
coompanies in non impact sectors. In the Netherlands I expect only
Oikocredit ans theme investmentfunds offered by TriodosBank, ASNBank
and RobecoSAM offer (more) assurence the allover impact is positive.