Impact investing in listed equities
Key highlights
Differentiating between investment products across the industry is becoming increasingly challenging. Thanks to the rise of ‘greenwashing’ and ‘impact washing’, transparency and authenticity are more important than ever before.
Our solution is to be as open and transparent as possible about our approach to impact investing. Our perspective, including WHEB's model of positive impact, is set out in a white paper and is also summarised below.
In this paper we:
- Set out the different types of investment impact
- Discuss impact investing in the context of listed equities
- Make the case for WHEB’s holistic model of impact investment in listed equities
Intentional impact investment
Intention sits at the core of what it is to be an impact investor. The decision to invest must be clearly based on the ‘enterprise impact’ of the business. By ‘enterprise impact’ we mean the impact which is delivered by the products and services that the investee company is supplying. The impact story needs to be a significant part of the investment case and the investor needs to intend for the investment to contribute to positive impact.
We are dedicated to investing in this way. For each of our nine investment themes we set out a ‘problem statement’ that we are trying to solve. We then set out a ‘theory of change’ that explains how the investee company’s products and service help address this particular challenge.
Impact measurement
Clients and their advisors want to know that we are investing their money in a way that aligns with their values and enables positive outcomes. We embrace this deeper client interest in our portfolio companies and we have made a commitment to be highly transparent in sharing information about our philosophy, policies and practices.
WHEB's investor contribution
Our own contribution arises from WHEB’s support and encouragement for investee companies, or enterprises, to increase positive outcomes. Our investment provides direct support to the share price which can benefit companies in multiple ways but in addition, there are two key area where we contribute as investors:
- Enterprise level investor contributions: we can have a direct impact on companies for example, through stewardship activities such as engagement with companies and proxy voting at AGMs.
- Systems level investor contributions: refers to engagements aimed at the wider financial system that indirectly support positive impact businesses
WHEB’s contribution in this area includes engagement downstream with regulators, policy makers and standard setters, as well as upstream back to clients and their advisors.
WHEB's operations
The vast majority of WHEB’s impact comes through the investments that we make. However, as a business we do also have a direct social and environmental footprint. We seek to maximise the positive impact that we can have through our
own operations.
This work is covered in Section 5 of our 2022 Impact Report
