Investing with impact
Aiming to generate market-beating long-term returns by investing in solutions to the world’s environmental and societal problems
Launched in October 2020, Regnan Global Equity Impact Solutions is a high conviction, diversified, global multi-cap portfolio with very low turnover and a strong emphasis on driving impact through engagement. Our experienced four-person Equity Impact Solutions team aims to generate long-term outperformance by investing in mission-driven companies that create value for investors by providing solutions for the growing unmet sustainability needs of society and the environment.
The team uses the 17 United Nations Sustainable Development Goals (SDGs) and their 169 underlying targets as an investment lens. Drawing on the SDGs and their targets, we have built a comprehensive proprietary framework – the Regnan SDG Taxonomy.
Our taxonomy takes the most pressing global environmental and social problems and links them to the solutions sold by companies today. We believe that by analysing these solutions our taxonomy allows us to identify companies with a strong chance of producing market-beating long-term returns.
We use a rigorous approach to testing the potential of each of the solutions to deliver a large-scale impact. We do this by formulating a Theory of Change and looking at the expected total addressable market for each of them.
The 17 Global Goals:
The United Nations Sustainable Development Goals
In 2015, world leaders agreed to 17 Global Goals, officially known as the UN Sustainable Development Goals or SDGs.
It’s now five years on, and we have more work then ever to do. These goals have the power to create a better world by 2030, by ending poverty, fighting inequality and addressing the urgency of climate change.
Guided by the goals, it is now up to all of us, governments, businesses, civil society and the general public, to work together to build a better future for everyone.
A growing set of solutions
We have identified more than 150 solutions and created an investment universe of more than 2,200 listed companies – and these numbers are still growing, now helped by the support and insight of our colleagues in the Regnan Engagement, Advisory and Research (EAR) team. From this universe, we choose the companies with the best potential for share price growth, because they have found the most innovative and effective way of providing a solution.
We aim to achieve positive impact by:
- Keeping companies on mission – We engage with management to influence strategy and try to keep them focused on business areas that contribute to solutions.
- Engaging to reduce negative impacts – We talk to the management of portfolio companies about issues such as the environmental footprint of their supply chains and working conditions in their suppliers’ factories. By reducing negative impact, we aim to magnify total net positive impact.
- Supporting management – We invest in companies we believe should outperform the market in the long term. Assuming we retain our initial conviction, sometimes this means accepting underperformance in the short term, because the management prizes long-term potential over the next quarter’s earnings. Our support, as a long-term investor, increases the company’s ability to stay impactful.