Aiming to generate market-beating long-term returns by investing in solutions to the world’s environmental and societal problems
Investing with impact
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 impact investment team aims to generate long-term outperformance by investing in mission-driven companies that provide solutions for the growing unmet sustainability needs of society and the environment.
Regnan’s impact investment team uses the 17 United Nations Sustainable Development Goals (SDGs) and their 169 underlying targets as an investment lens.
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.
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Five years on the United Nations is calling for significant new investment to address the SDGs.
In 2019 the UN called for “a decade of ambitious action” to deliver the goals by 2030. There’s an estimated gap of $US2.5 trillion to $US3 trillion per year to achieve the SDGs in developing countries.
But the potential dividends of that investment are significant.
Achieving the SDGs could open up $US12 trillion of market opportunities and create 380 million new jobs, the UN believes. Action on climate change could result in US$26 trillion worth of savings by 2030.
A “fundamental shift in the international financial system is needed to align global economic policies and financial systems with the 2030 agenda”, UN Secretary-General António Guterres said in 2019.
“National policy frameworks are key to reducing risks, creating an enabling business environment, incentivising investment in public goals and aligning financial systems with long-term sustainable development.”
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 Insight and Advisory Centre. 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.
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Our eight current portfolio themes
Health & Wellbeing
Improved life expectancy and quality
Energy Transition
Transforming the energy system to power a low-carbon economy
Circular Economy
Resource efficiency, reusability and recyclability
Future Mobility
Low carbon transportation
Food Security
Sustainable food supply and productive farmlands
Education
Access to quality education
Financial Inclusion
Financial Services for underserved populations
Water
reservation of and access to water
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.