It will complement the existing impact equity strategy, which launched in September 2018, reinforcing UBP’s franchise investing in companies that are helping to solve global problems such as scarce resources, climate change and poverty. Furthermore, UBP has enhanced its impact governance by establishing an Impact Advisory Board and an Impact Investment Committee.
The new strategy intends to generate a measurable social and environmental impact alongside a financial return by investing in listed companies in emerging markets. The portfolio will consist of 35–45 high-conviction emerging market stocks across six themes mapped to the UN Sustainable Development Goals: basic needs, health and well-being, inclusive and fair economies, healthy ecosystems, climate stability and sustainable communities. Emphasis will be placed on innovative companies with strong growth potential that are looking to drive positive change. Initial investments will include companies involved in renewable energy and energy storage, transport disruption, life/health insurance innovation and microfinance.
The portfolio will be co-managed by Mathieu Nègre (Head of Emerging Equities) and Eli Koen (Emerging Equities Portfolio Manager). They will be supported by two analysts and Simon Pickard, who has joined UBP as a consultant to the Bank’s impact franchise after a distinguished career as an emerging market investor. When selecting stocks, they will use UBP’s proprietary ‘IMAP’ scoring methodology*, which judges the impact intensity of each stock and assigns it a score out of 20; a score of 12 is the minimum threshold for acceptance into the portfolio and watchlist.
As well as strengthening its impact product range and to ensure that UBP’s approach meets the most stringent impact criteria, the Bank has formalised its governance arrangements in this area by setting up two dedicated entities, the Impact Advisory Board and the Impact Investment Committee.
The Impact Advisory Board is chaired by Anne Rotman de Picciotto, a member of UBP’s Board of Directors. Its role is to take thought leadership drawn from external experts in fields outside of investment management and embed it into the Bank’s impact platform. The Board meets every six months to review the impact case behind companies held in UBP’s impact investment solutions. The Impact Advisory Board’s external sustainability experts are:
- Jake Reynolds, Executive Director, Cambridge Institute for Sustainability Leadership (CISL);
- Kanini Mutooni, Managing Director of Europe, Middle East and Africa for Toniic, the global action network for impact investors;
- Tony Juniper, Chair of Natural England, the UK government’s official nature conservation agency, and a campaigner, writer and sustainability adviser as well as Executive Director for Advocacy and Campaigns for WWF-UK.
The Impact Investment Committee is in charge of developing the Bank’s impact investing capabilities, while also incorporating industry best practice. Chaired by Simon Pickard, the Committee includes Victoria Leggett (Head of Impact Investing), Rupert Welchman (Impact Portfolio Manager), Karine Jesiolowski (Head of Responsible Investment, Asset Management) and Didier Chan-Voc-Chun (Head of Multi-Management and Fund Research).
Nicolas Faller, Co-CEO of Asset Management at UBP, said:
“In the midst of the ongoing public health crisis, which is having such devastating outcomes, the long-term importance of impact investing is now even clearer, since it is one of the ways we can address areas in which we are currently falling short of our social goals. This latest launch and the strong impact governance we now have in place underline our continued commitment to responsible investment. We believe that companies helping to solve the acute challenges faced by society and the planet are ideally positioned for steady growth over the coming decades.”
UBP’s impact franchise benefits from the Bank’s strong collaboration and partnership with the CISL and membership of the Investment Leaders Group (ILG), a select network of pension funds, insurers and asset managers committed to advancing the practice of responsible investment. Facilitated by the CISL, the ILG is a unique nexus of academic research and cutting-edge corporate leadership. As part of its ongoing commitment to responsible investment, UBP has been a signatory of the United Nations Principles for Responsible Investment since 2012. UBP is also a member of Swiss Sustainable Finance (SSF) and of Sustainable Finance Geneva (SFG).
* UBP’s proprietary IMAP system lies at the heart of its process and enables the team to gauge a company’s impact intensity in an impartial manner. IMAP stands for Intentionality, Materiality, Additionality and Potential. Each IMAP criterion is marked out of 5, giving a total score out of 20:
Click on the image to enlarge it.