What is impact investing?
Impact investing is an exciting new approach for investors who want to generate positive, social and environmental impact as well as financial returns. The intention is to use the allocation of capital to make our world a better place to live.
How does impact investing work?
The impact investment market provides capital to address the world’s problems. It does this through the creation of funds and bonds that support certain sectors. Sectors of significance include: sustainable agriculture, renewable energy, conservation, micro finance and generating affordable and accessible basic services such as housing, healthcare and education.
What is behind the creation of impact investments?
It is widely recognised that we need to change. Our capitalist economy isn’t providing the solutions we need to solve the world’s problems and we cannot rely on philanthropists alone. As a society we need to take more responsibility for our actions across all aspects of our lives, including how and where we invest our money.
How is the world responding?
With the United Nation’s Sustainable Development Goals (SDGs)
The United Nations 17 Sustainable Development Goals
The UN SDGs are the blueprint to achieve a better and more sustainable future for all. They address the global challenges we face, including those related to poverty, inequality, climate, environmental degradation, prosperity, and peace and justice. The Goals interconnect and, in order to leave no one behind, they have a target achievement date of 2030. You can find out more about the UN’s 17 sustainable development goals here.
What is Paradigm Norton doing to help?
As a values-led and B Corp™ firm we are conscious of the impact we have on people, the environment and wider society.
In our annual impact report we explain what we are doing, directly, as a business.
We also help our clients take this into account as part of their financial planning. Sometimes this takes the form of philanthropy, but more often we see clients incorporating this into the way they invest their money.
Investing with intent
In 2019 we launched our PNi investment portfolios, now known as PN Intentional. This is a series of portfolios with asset allocations that are designed to be suitable for investors with different risk profiles.
These portfolios share their core with our PNr (responsible) portfolios, which are based on the academically proven pillars of our investment philosophy. This part of the portfolio uses highly diversified funds, screened and tilted to support ESG outcomes, and delivered by fund managers with a proven commitment to engagement. (You can read more about why we think engagement is important here). Taking this approach helps provide market-like financial returns.
The PNr portfolios include an allocation to funds which systematically target areas of investment with academically evidenced higher expected financial returns. Instead, the PNi portfolios include an allocation to funds which set out to make a positive contribution towards the achievement of some of the UN SDGs.
To deliver on this intent we have researched fund managers who specialise in this area. They have a clear theory of change, and report on the outcomes of their intentional approach. These funds are focused on a smaller number of underlying investments than the core of the portfolio.
If you’d like to hear more about how we approach this way of investing please get in touch.
If we can help you and your family, or friends, please get in touch with any of the Paradigm Norton team, after all, we are here to help. You can call us on 01275 370670 or 020 7269 7960. Money matters, but life matters more.
Investing places your capital at risk and investments may fall or rise in value.
