Interview with Carly Brewster
Product specialist Equity
Our planet is at a tipping point. It’s more important today than ever before to take action. With some of the world’s largest countries and conglomerates stepping up to the plate, what can investors do to effect positive change, particularly in the public equities space?
Carly Brewster: Public equity markets are excellent platforms for channeling large capital flows into sustainable initiatives. By allocating funds to companies developing and producing the technologies to help solve environmental challenges like climate change, investors can make a real difference. They provide companies with the capital required to develop these solutions, and they give a clear signal to the market that these technologies are becoming more and more relevant.
What kind of companies are these? What kind of technologies are they delivering and how exactly do they create impact?
The Environmental Impact Strategy invests in companies that deliver environmental innovations enabling others to reduce their ecological footprint. These include companies developing solutions for energy-efficient buildings and transportation, technologies that enable heavy industry to use less material and produce less waste, smart recycling solutions for industry, and clean energy production. What’s more, engaged investors can play an active role via proxy voting and by entering into direct dialogue with the companies they invest in.
Is there a yardstick for assessing impact? What do investors usually look for in these companies when thinking about making a difference?
They select companies offering products and services that ultimately help others to pursue sustainability goals. This generally has the greatest impact by helping corporations and communities reduce their carbon emissions, use less energy, materials and natural resources, dispose of waste more responsibly and increase the amount they recycle. In addition to looking for companies that make a significant impact through the technologies and services they provide to the market, investors should also consider how these companies contribute to the Sustainable Development Goals.
Is this impact significant? Are you able to measure the level of impact your portfolio companies are having?
Experienced investors can measure the impact that companies make, but it requires a thorough analysis. Deep-diving into companies’ annual reports and sustainability publications is just as important as direct engagement with the companies’ senior management. These activities enable investors to determine the degree of impact and report on measures such as megawatt-hours of electricity saved, CO2 emissions avoided, cubic meters of wastewater treated, and tons of recycled plastic kept out of our waterways.