The Environmental and Social Themed Investing (E&S) Work Stream covers investments in areas such as clean technology (including renewable energy, waste and water management, sustainable forestry and agriculture), inclusive finance and products and services to support global health. In short, the work stream covers investments that can generate positive environmental and social impacts while producing attractive financial returns. Recognising global mega trends, such as climate change and loss of biodiversity, and proactively seeking investment opportunities which offer solutions to these issues can be part of responsible investment practice.
About the work stream
The aim of the work stream is to explore how environmental and social themed investments can form part of a well-performing portfolio, their wider connection to a sustainable global financial system and how they can benefit the environment and the society as a whole. To deliver this goal, the work stream supports signatories to explore investment opportunities that deliver positive environmental and social impact within a fiduciary and market-return context.
For additional information regarding the PRI Initiative’s work in inclusive finance, please visit the Principles for Investors in Inclusive Finance page.
Resources listed may require PRI signatory extranet access.
What is environmental and social themed investing?
- Environmental and social themed investing (October 2012) In this short paper we define what the PRI Initiative means by E&S themed investing and how this type of investing relates to responsible investment.
- Fiduciary duty and environmental and social themed investing – summary of US discussion (July 2013) This paper summarises comments and insights on this topic of Keith Johnson, Reinhart Boerner Van Deuren s.c. and Michael Lohmeier, Wespath Investment Management (General Board of Pension and Health Benefits of the United Methodist Church).
Examples of institutional investors’ environmental and social themed investments
These case studies, published in October 2013, demonstrate how E&S themed investing can form a valuable part of an institutional investors’ approach to responsible investment. Each focuses on a particularly distinctive aspect of the investors’ process or the investments chosen as set out below.
- Environment Agency Pension Fund This case study describes how clear and stringent ESG requirements were embedded into the tendering and appointment processes for a recent mandate in environmentally themed funds in property, sustainable infrastructure, forestry/timberland and agriculture/farmland.
- Wespath Investment Management This case study outlines how Wespath developed its highly successful Positive Social Purpose Lending Program, and overcame the challenges it faced.
- Local Government Super This case study looks at Local Government Super’s environmental and social themed investments within four asset classes: international listed equities, private equity, sovereign bonds and absolute return strategies. It describes how these investments help LG Super hedge against climate change risk, their performance to date and how LGS identifies and executes them.
- PGGM This case study outlines how PGGM goes about understanding the direct and wider impacts of its E&S themed investments, illustrated using examples of how it applies its approach to microfinance investments.
- Storebrand This case study looks at Storebrand’s investments in health and agriculture sectors focusing particularly the strict criteria Storebrand uses to identify and evaluate these investments.
- Merseyside Pension Fund This case study outlines the rationale for and the structure of investments made to support local regeneration.
- Christian Super This case study focuses on Christian Super’s investments in community infrastructure and community finance. It illustrates the clear social impacts the selected funds aim to deliver. It also outlines the investment structures and risk mitigation strategies these funds employ to facilitate institutional investment.
Understanding the impact of your investments
- Impact investing in emerging markets (6 February 2014) In this webinar we learned how indirect investors can efficiently monitor and improve the environmental and social outcomes of their investments, including how collaboration and publicly available tools can help investors in this process.
- The environmental and social impact of investments (4 November 2013) In this webinar we explored questions around what impact is and how positive environmental and social impacts can be achieved through different responsible investment approaches. Click here to read a summary of the webinar discussion.
- Understanding the impact of your investments (July 2013) This paper provides an introduction to environmental and social impact performance measurement and reporting. It explains the value in measuring impact and provides guidance, what investors should be tracking and some publicly available tools and techniques that can help.
- PGGM (October 2013) This case study outlines how PGGM goes about understanding the direct and wider impacts of its E&S themed investments, illustrated using examples of how it applies its approach to microfinance investments.
- Sarona Asset Management (October 2013) In this case study Sarona explains how they developed a set of environmental and social indicators in their due diligence and reporting processes.
- Obviam (October 2013) This case study describes how Obviam approached this challenge, by developing meaningful due diligence and reporting indicators which map against clear expectations of impact and corresponding strategic objectives.
- Investing in access to finance: the case of South Africa (2013)
- US $1 trillion in seven years – where next for investing in clean tech? (2012)
- Can investors contribute to social and environmental progress without sacrificing financial returns? (September 2011)
- Environmental investment opportunities (October 2010)
- How can institutional investors ensure financial as well as ESG performance of microfinance funds? (October 2010)
- Investing for impact: are ‘ESG Alternatives’ the next big opportunity? (July 2009)