Investment Management

Responsible Investing

The world of investment is constantly changing. In order to align with the latest global developments and opportunities, IPS ensures insight, speed and agility in all our investment decisions. This responsive, informed and independently-minded approach achieves results for our clients.

What is responsible investing?

As awareness of climate change and social inequalities has risen, many of our clients have chosen to invest in a way that makes a difference in the world. Responsible investing, also known as sustainable investing, is about managing your wealth in a way that changes the world for the better.

While traditional investing focuses on financial returns, ESG investments take into account environmental, social and governance issues to help support a sustainable future.

 

Environmental: A company’s impact on the environment.
Social: A company’s impact on its employees and society.
Governance: A company’s ethical standing and how it meets regulatory requirements.

Our responsible investment philosophy

IPS Capital aims to be a leader in ESG investments. We began investing in renewable infrastructure in 2016 and have continued to broaden our approach ever since. When we invest, we seek businesses that are profitable, sustainable, and are aligned with our clients’ values.

We build our responsible investment portfolios using best-in-class companies that are champions of specific long-term environmental themes. Examples of how we include sustainability as part of your portfolio are:

1. Tackling environmental issues through green bonds.
2. Addressing global inequality through micro-lending institutions that help to alleviate poverty.
3. Supporting companies that tackle gender inequalities in the workplace.

We invest through fund managers who are experts in a particular sector, rather than in individual stocks, and we include investment consultant Mercer’s ESG ratings in all our decisions.

We believe the key to ethical investing is screening and there are two methods to assess the quality of a prospective ESG investment:

Negative screening
This is the more popular method and involves the avoidance of firms or funds that engage in nefarious practices, such as arms dealing or the production of fossil fuels.

Positive screening
This method takes the process a step further by pursuing investments that seek to make a difference on themes such as clean energy, gender equality or carbon offsetting.

Our approach to impact investing

Impact investing aims to achieve positive social or environmental benefit or change, while delivering a financial return. We recognise that pursuing positive social change is just as important as investing in a greener economy. This is why we allocate part of our portfolio to specific themes.

 

Examples of themes we consider crucial to achieve a positive impact are:

Gender equality

We recognise that there are socioeconomic reasons to prioritise businesses that manage gender equality effectively. Companies that promote gender equality among their workforce often outpace their peers and we believe directing capital to these companies encourages wider adoption of these values.

We invest in funds which target best employers for women on the basis of trackable metrics such as: percentage of women on the board of directors, percentage of women in management, overall percentage of women in the workforce, policies for paternal and maternal leave, flexibility around working from home and whistleblowing policies. We feel that those companies which embrace talent and diversity are more inclined to consider the impact of ESG risks and opportunities, and will be better positioned for the challenges of tomorrow.

Financial inclusion

Access to financial services (including microfinance) is considered an enabler to end poverty. We aim to invest for both impact and financial gains by investing with trusted partners who lend to financial institutions in emerging and frontier markets. This way, we can indirectly support small and medium enterprises in the area and positively contribute to inclusion and reduced inequalities, while collecting a positive return.

Renewable energy

We invest for the green transition by providing capital to generators of clean energy. With the Inflation Reduction Act underway, we believe this is an under-appreciated opportunity by the market to make impact as well as generate positive returns. Technologies we have exposure to include: wind, solar, hydro, anaerobic digestion and batteries for energy storage. The latter in particular help the transition to net zero by fixing the inherent intermittency problem with renewables, thus providing essential infrastructure to accelerate adoption worldwide.

OUR APPROACH

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OUR PEOPLE

Simon Moriarty

Partner

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Chris Brown

Partner,
Chief Investment Officer

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Tiziana Maida

Head of Research

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