Combining returns and impact

An impact investment is made with the intention of having a positive and measurable social and environmental impact, accompanied by financial performance. This notion of intentionality is fundamental. Impact investments have been designed with the aim of creating a significant positive impact for society or the environment.

Wim Van Hyfte
Global Head of ESG Investments and Research
We believe that financial performance must be intertwined with societal impact. This nuance is unique to our definition of impact and is a major and original component of our approach as responsible investors.

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Differentiating between sustainable management and impact investing

Sustainable management incorporates Environmental, Social and Governance factors into the analysis and portfolio construction process without the investor having any control over the management of the company beyond an active voting and engagement policy. Our impact investment solutions seek to fill this gap, by investing in private equity funds that have defined clear and measurable social or environmental impact objectives [1] , or through our bond management, by choosing to invest in sustainable corporate or government projects [2] .

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Measuring the impact

We want the impact of every investment that we make to be measurable, and we want the company management team to be accountable for this. For example, the number of litres of water saved or purified, the number of jobs created, or the number of new schools opened. These specific measurements are mapped, monitored and communicated transparently and regularly as part of the United Nations Sustainable Development Goals.

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Aligning performance

We firmly believe that companies that rise to the challenges of sustainable development, together with their financial opportunities and challenges, are those that will create more value for investors. Alignment of interests is an important factor for us: Candriam's impact investment managers only receive performance fees if the socio-economic and financial performance targets are met.

[1] Principal risks associated with the strategy: Risks inherent in all private equity investments, risks linked to the valuation of investments, risks linked to non-payment by investors, risks linked to lack of investment, risk linked to ESG investment.

[2] Principal risks associated with the strategy: Risk of capital loss, risk linked to ESG investment, interest rate risk, credit risk.

Figures are worth a thousand words. 

€79 mln

AuM

2

strategies

17

SDG at the heart of the investment philosophy

5

types of instruments: green bonds, social bonds, sustainability linked bonds, SDG aligned bonds and Private Equity fund

Collective experience for the benefit of impact investing

Impact funds must be valued according to their intentionality and impact objectives, as well as their financial performance. On the strength of 25 years of experience in ESG, we have the expertise to quantify the results in terms of impact and sustainable development, and we apply this to all our impact strategies. Our expertise in multi-management gives us access to many managers around the world and enables us to identify the best ones for our impact management. Our long-established experience in bond management has also enabled us to develop and test a methodology for sustainable analysis of corporate and sovereign bonds.

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Acting at the heart of companies

We seek to have direct control over the management of the company by investing in private equity funds that have defined clear and measurable social or environmental impact objectives. We focus on a limited number of strategies that have many years of experience in the mission-driven segment and where the capital raised is critical to the achievement of those missions. This makes our impact more direct: it is a consequence of the company's creation and our decision to invest in it.

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Impact bonds - contributing to the SDGs

We combine our ESG expertise with our bond analysis methods to ensure that every impact investment offers sufficient solvency and real ESG commitments that are in line with best practices. To do this, we apply a rigorous process that gives us a precise framework and allows us to avoid greenwashing by issuers.

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Putting it into practice

Our multi-manager impact strategy offers our clients exposure, via European private equity and venture capital funds, to companies whose performance is linked to measurable social and economic factors. Our bond impact strategy gives clients the opportunity to contribute to long-term impact projects via securities that are recognised as encouraging the realisation of one or more sustainable development objectives set out in the United Nations Development Programme. Part of our income is donated to the Candriam Institute for Sustainable Development, which supports projects linked to the environment and social inclusion.

FUNDS

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Main risks on Impact Strategies

  • Risk of loss of capital
  • Equity risk
  • Interest rate risk
  • Credit risk
  • High Yield risk
  • Currency risk
  • Liquidity risk
  • Concentration risk
  • Derivative risk
  • Counterparty Risk
  • Volatility risk
  • Emerging market risk
  • Leverage risk

Find out more

  • All our publications
  • Meet our experts
  • Candriam in the press

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