Recently, Commonfund convened an expert panel of investment managers to hold a roundtable discussion and take a closer look at the different impact investing strategies being implemented today.
The roundtable participants were: Timothy Coffin, Senior Vice President of Breckinridge Capital Advisors; David Richardson, CFA, Head of Business Development and Client Service for Impax Asset Management in North America; Brian Trelstad, a Partner at Bridges Ventures; and Suzanne West, President and CEO of Imaginea Energy Corp. The exchange was moderated by Commonfund. Excerpts from the discussion follow:
How Do You Define Impact Investing?
Brian Trelstad, Partner at Bridges Ventures, a London- and New York-based private equity and real estate fund manager specializing in sustainable and impact investing.
“We view it as a strategy with multiple asset classes as opposed to an asset class itself. We focus on sustainability and societal impact in both growth equity and real estate, for example, and we’ve developed what we call an “impact-driven” approach to select and engage with our investments. That means focusing on opportunities across asset classes where investments can generate attractive returns by helping to meet pressing social or environmental challenges.”
Suzanne West, President and CEO of Imaginea Energy Corp., a private equity natural resources company based in Calgary, Canada, chimed in:
“Here in North America and across the world there are a lot of energy companies that have big corporate social responsibility programs. The challenge, in my mind, is that they are doing this under the banner of ‘should,’ which, ironically, means it might not be sustainable…. when you wake up you don’t think about breathing, you just do it. If you make it part of your business and think of it as an opportunity rather than a cost, the possibilities that are showing up for us in this space are shockingly good. The magic of ‘and’ is that both get better.”
What Are Some Factors That Led You To The Emergence of Your Particular Style of Impact Investing?
Timothy Coffin, Senior Vice President of Breckinridge Capital Advisors, a manager of high-grade fixed income portfolios:
“We believe that the history of responsible investing has largely been written in the equity market because a lot of it is based on negative screening and shareholder actions. From our perspective, ESG is a natural fit for the credit market as a risk issue, and we think it will become very widely employed in the credit market because of an increasing focus on effective pricing of long-term risk. A factor helping drive the interest is the increase in data availability. The more we study sustainable investing and the demand for it, the more we realize how much data has come online in the last five or six years. The evolution of data providers — Bloomberg, MSCI Sustainalytics and others — gives us the opportunity to perform analysis that is reliable from sector to sector.”
“My epiphany was the realization that energy is a huge part of people's’ standard of living and raising the standard of living is one of the best solutions we have to address really big problems like food and clean water. Energy is actually part of the solution—we have the potential to be such a force for good. Too often in my industry, however, parties are relegated to being either tree huggers or greedy capitalists. As an entrepreneur, it occurs to me that we are missing all the amazing space in between, which has the potential to make the pie bigger for everyone.”