There’s a lot of theoretical talk in the world of trusts and foundations about how to reflect impact in investment strategies – and how to evaluate it. Following our own extensive period of deliberation, we can talk about this on a practical level.
We have developed a values-based framework, and while we are not claiming to have got it 100% right, we are a step on from simply talking about it. By sharing some key learnings from our journey, we hope to help others move their ideas forward too.
Top tips
1. Clearly outline what you hope to achieve, or what you think the outcome will look like. It’s important to think about how the framework will inform future decision making rather than just be another report to produce. Whatever framework you design, ensure that it’s used to inform and influence investment decisions and be prepared to keep refining it.
2. Make sure everyone understands the terminology. There is a lot of jargon and confusion across the sector about the definition of responsible investment, ‘ESG investment’, impact investment and social investment. Don’t leave anything open to interpretation.
3. Don’t confine these conversations to the Investment Committee. Clearly demonstrate why this is a Board responsibility and inextricably linked with your strategy and reputation. It’s your Investment Committee’s job to implement the Board’s wishes. Expect to have multiple conversations with the Board. Keep finding different ways to go back to them, with different hooks. Be prepared for some robust discussions and differences of opinion. You might even lose some people along the way if they don’t share your vision.
4. Use your power as asset owners to request information from your asset managers. Given they manage your money, they should ensure client’s questions are answered.
5. Be transparent about the limitations of data, but pragmatic in accepting the use of existing third party data providers where alternatives are not readily available.
Read this conversation with our Chief Executive Susan Kay and Chief Investment Officer Andrew Gnaneswaran, in which they reflect on our journey to becoming an impact-intentional investor.
Find out more about our investment practices in our recently published Strategic Framework – a review of the plan period 2020-25.