As a social impact investor, we have traditionally focused on the intentional impact we help create through our investments. This is different from Environment Social Governance (ESG). Social impact focuses on the “what” - the solutions our investments intentionally contribute towards addressing entrenched social issues in the UK. In contrast, ESG focuses on the “how” - the ways in which these solutions are delivered.
We nevertheless understand that our ESG approach is integral to achieving our mission “to improve the lives of people in the UK through investment with a sustainable return”. We therefore focus on ESG risk identification and mitigation, guided by our Responsible Business Principles. We are also a proud signatory of the UN-supported Principles for Responsible Investment.
We recognise that the ESG landscape is rapidly evolving; we continue to iterate our own process to take into account market practice. Our approach is guided by three core principles:
- Proportionality: The rigour and scope of our ESG approach is proportionate to the nature and level of the risk being addressed.
- Credibility: In order to fulfil our responsibilities to stakeholders, our approach must not only be robust, it must be seen to be robust, and should therefore stand up to external scrutiny.
- Usefulness: Our ESG approach must deliver on its stated aim to identify and mitigate risks, and thereby improving our investment decision-making.
For more detail about our ESG approach, please see our Responsible Investment Policy.