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- EQ Positive Impact Portfolios
| Fund Name | SRI Style | Product | Region | Asset Type | Launch Date |  |
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| EQ Positive Impact Portfolios | Sustainable Style | DFM/Portfolio | Global | Multi Asset | 31/08/2012 | |
Fund Size: £688.00m Total screened & themed / SRI assets: £1800.00 Total Responsible Ownership assets: £1800.00 Total assets under management: £1800.00 As at: 06/07/24 |
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OverviewThe EQ Positive Impact Portfolios have a dual mandate:
This is achieved by investing in actively managed funds, focused on companies that deliver positive impact through their products and services, while also being responsibly run. It is not enough to simply limit damage to the environment and avoid causing social ills. We intentionally go further than that: our screening and research process actively selects funds which, in turn, actively allocate capital towards the solution-providers to the greatest social and environmental challenges (as framed by the UN Sustainable Development Goals). Our process also places strong emphasis on engagement, which helps to increase the positive impacts of the portfolios over time and evolve these with best practice. We have developed unique impact measurement and reporting to deliver on the ‘sustainability transparency’ that the sector needs. Alongside our socio-environmental research processes, our investment management team apply their knowledge and expertise to find fund opportunities which deliver market beating financial returns. |
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FiltersFund informationSustainability - GeneralSustainability policy Green / Sustainable property strategy Circular economy theme UN Sustainable Development Goals (SDG) focus UN Global Compact linked exclusion policy Encourage more sustainable practices through stewardship Sustainable transport policy or theme Sustainability theme or focus Report against sustainability objectives Sustainability focus Environmental - GeneralEnvironmental policy Plastics policy Waste management policy or theme Resource efficiency policy or theme Favours cleaner, greener companies Environmental damage and pollution policy Limits exposure to carbon intensive industries Nature & BiodiversityNature / biodiversity focus Illegal deforestation exclusion policy Sustainable fisheries policy Responsible palm oil policy Nature / biodiversity based solutions theme Deforestation / palm oil policy Nature / biodiversity protection policy Water stewardship policy Avoids genetically modified seeds/crop production Biodiversity / nature policy Climate Change & EnergyClimate change / greenhouse gas emissions policy Coal, oil & / or gas majors excluded Fracking and tar sands excluded Arctic drilling exclusion Fossil fuel reserves exclusion Clean / renewable energy theme or focus Energy efficiency theme Invests in clean energy / renewables Encourage transition to low carbon through stewardship activity Fossil fuel exploration exclusion - direct involvement Fossil fuel exploration exclusion – indirect involvement Social / EmploymentSocial policy Labour standards policy Favours companies with strong social policies Mining exclusion Vulnerable / gig workers protection policy Diversity, equality & inclusion Policy (fund level) Health & wellbeing policies or theme Fast fashion exclusion Responsible mining policy Ethical Values Led ExclusionsGambling avoidance policy Armaments manufacturers avoided Alcohol production excluded Tobacco and related product manufacturers excluded Civilian firearms production exclusion Pornography avoidance policy Animal welfare policy Human RightsResponsible supply chain policy or theme Indigenous peoples’ policy Oppressive regimes (not free or democratic) exclusion policy LGBTQ+ policy Modern slavery exclusion policy Child labour exclusion Human rights policy Meeting Peoples' Basic NeedsWater / sanitation policy or theme Demographic / ageing population theme Responsible food production or agriculture theme Healthcare / medical theme Plant based / smart food production theme Green infrastructure focus Invests > 5% in social bonds Invests > 5% in social housing Invests in social property (freehold) Gilts & SovereignsGilts / government bonds - exclude some Invests in gilts / government bonds Invests in sovereigns subject to screening criteria Banking & FinancialsExclude banks with significant fossil fuel investments Invests in banks Only invest in TCFD (ISSB) aligned banks / financial institutions Invests in financial instruments issued by banks Exclude insurers of major fossil fuel companies Invests in insurers Governance & ManagementUN sanctions exclusion Encourage board diversity e.g. gender Encourage TCFD alignment for banks & insurance companies Avoids companies with poor governance Governance policy Anti-bribery and corruption policy Encourage higher ESG standards through stewardship activity Fund GovernanceESG integration strategy Employ external (fund) oversight or advisory committee ESG factors included in Assessment of Value (AoV) report Asset SizeInvests in small, mid and large cap companies / assets Invests mostly in large cap companies / assets Over 50% large cap companies Invest in supranationals Targeted Positive InvestmentsInvests > 5% in sustainable bonds Invests > 50% in green bonds Invests > 5% in green bonds Invests >50% of fund in environmental/social solutions companies Invests >25% of fund in environmental/social solutions companies Invest > 5% in transition bonds Impact MethodologiesInvests in sustainability / ESG disruptors Invests in environmental solutions companies Aims to generate positive impacts (or 'outcomes') Over 50% in assets providing environmental or social ‘solutions’ Aim to deliver positive impacts through engagement Positive social impact theme Described as an ‘impact investment fund’ Measures positive impacts Invests in social solutions companies Positive environmental impact theme Publish ‘theory of change’ explanation How The Fund WorksNorms focus Combines ESG strategy with other SRI criteria Significant harm exclusion Positive selection bias Assets mapped to SDGs Participated in sustainability solutions IPOs or new issuances Focus on ESG risk mitigation SRI / ESG / Ethical policies explained on website Combines norms based exclusions with other SRI criteria Strictly screened ethical fund Balances company 'pros and cons' / best in sector Different risk options of this strategy are available Negative selection bias Unscreened Assets & CashAll assets (except cash) meet published sustainability criteria No ‘diversifiers’ used other than cash Intended Clients & Product OptionsIntended for clients who want to have a positive impact Faith friendly Intended for investors interested in sustainability Available via an ISA (OEIC only) Portfolio SRI / ESG options available (DFMs) Bespoke SRI / ESG portfolios available (DFMs) Multiple SRI / ESG portfolio options available (DFMs) Intended for clients interested in ethical issues Fund management company informationAbout The BusinessResponsible ownership / stewardship policy or strategy (AFM company wide) Offer structured intermediary training on sustainable investment Specialist positive impact fund management company Diversity, equality & inclusion engagement policy (AFM company wide) Vulnerable client policy on website (AFM company wide) Boutique / specialist fund management company Responsible ownership / ESG a key differentiator (AFM company wide) ESG / SRI engagement (AFM company wide) Integrates ESG factors into all / most (AFM) fund research SDG aligned aims / objectives (AFM company wide) Offer unstructured intermediary sustainable investment training In-house diversity improvement programme (AFM company wide) Responsible ownership policy for non SRI funds (AFM company wide) Collaborations & AffiliationsPRI signatory Climate Action 100+ or IIGCC member (under review) ResourcesEmploy specialist ESG / SRI / sustainability researchers Use specialist ESG / SRI / sustainability research companies ESG specialists on all investment desks (AFM company wide) In-house responsible ownership / voting expertise AccreditationsB Corp certified (AFM company wide) Engagement ApproachEncourage responsible corporate taxation (AFM company wide) Regularly lead collaborative ESG initiatives (AFM company wide) Engaging to encourage a Just Transition Engaging on labour / employment issues Engaging on biodiversity / nature issues Engaging on governance issues Engaging to reduce plastics pollution / waste Engaging on diversity, equality and / or inclusion issues Engaging to encourage responsible mining practices Engaging with fossil fuel companies on climate change Engaging on human rights issues Engaging on climate change issues Engaging on responsible supply chain issues Engaging to stop modern slavery Engaging to encourage more sustainable ‘diversifiers’ (e.g. derivatives) Engaging on the responsible use of AI Company Wide ExclusionsCoal exclusion policy (group wide coal mining exclusion policy) Controversial weapons avoidance policy (AFM company wide) Tobacco avoidance policy (AFM company wide) Coal divestment policy (AFM company wide) Review(ing) carbon / fossil fuel exposure for all funds (AFM company wide) Climate & Net Zero TransitionCarbon transition plan published (AFM company wide) Working towards a ‘Net Zero’ commitment (AFM company wide) Carbon offsetting - offset carbon as part of our net zero plan (AFM company wide) In-house carbon / GHG reduction policy (AFM company wide) Net Zero commitment (AFM company wide) Encourage carbon / greenhouse gas reduction (AFM company wide) ‘Forward Looking Climate Metrics’ published / ITR (AFM company wide) TransparencyPublish responsible ownership / stewardship report (AFM company wide) Full SRI / responsible ownership policy information available on request Publish full voting record (AFM company wide) Net Zero transition plan publicly available (AFM company wide) Dialshifter statement |
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PolicyOur fund research comprises both due diligence of a funds’ investment process and policies, as well as a detailed review (and ongoing monitoring) of all underlying holdings and reporting. This is necessary to ensure the Positive Impact Portfolios meet their mandate of maximising positive impacts (and avoiding harm as a natural by-product).
Positive screen: Solution providers The process really starts with the search for companies whose products and services will make a material positive impact on solving societal and environmental problems. We are using the UN Sustainable Development Goals (UN SDGs) as a framework to focus on the key issues that need to be tackled. Launched following the 2015 UN Summit in Paris, the 17 Sustainable Development Goals address the issues the UN sees as most challenging to our world between now and 2030.
We ensure that the investment process and philosophy of funds reflects a focus on selecting companies with a material and additional positive impact case. Additionally, we have developed our EQ SDG X-ray tool that allows us to analyse every underlying holding in regards to contributing solutions to the UN SDGs.
Negative screen: It is also important to screen out the most controversial sectors such as tobacco, armaments, gambling or pornography. Firstly, we review the screening policies applied by the fund’s investment process. Additionally, at EQ Investors, we have developed a proprietary tool that allows us to map all underlying holdings to negative effect on the UN SDGs. This process includes all traditional ethical controversial products/activity involvements but goes further. For example, it allows us to flag fossil fuel exposure, unhealthy nutrition, air freight or automotive pollution. This allows us to be transparent and avoid exposure to harmful sectors.
Balance: While our focus remains on selecting companies with products and service that show a material and additional positive impact, it is also important to look at the operations of the firms to assure these are also responsibly managed. We assure ESG integration to the fund investment process and have access to ESG data in-house to tests fund managers on their rationales. This will allow us to maximise exposure to net-positive impact companies om balance.
Engagement: As a result of this screening process, some of the Sustainable Development Goals align with significant investment opportunities for the Positive Impact Portfolios such as good health and well-being or affordable and clean energy while others do not represent realistic investment opportunities at all. We will engage with fund managers to also create positive Impacts on those UN SDG that are less readily investable, and better targeted through responsible company operations. We also engage on an ongoing basis to test fund manager adherence to process, flag any controversies, and push for evolution with best-practice.
Impact measurement: Impact measurement is a key prerequisite to ‘impact investing’ definitions. To measure the impact achieved by the portfolios, we have produced an impact report that details how the companies we invest in align to the UN Sustainable Development Goals. For 2 years we have also uniquely measured the impact generated by an investment in the EQ Positive Impact portfolios on number of social and environmental key performance indicators. We provide personalised impact reports via our online ‘impact calculator’. Green bond exposure is around 5% for a Balanced risk profile, 10% for a more cautious portfolio and under 3% for a more adventurous portfolio.
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ProcessAlongside a thorough financial analysis, the due diligence process is complemented with an equally detailed analysis of the ESG integration process, sustainability screens and the application of impact investing best-practices within the underlying funds. This is where we add significant value through our 10 years’ experience in evaluating sustainable investments. Given the quickly growing fund universe, there is increasing vagueness in terminology, and a related increase in “greenwash risk”.
Please request full process document for all details. |
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Resources, Affiliations & Corporate StrategiesEQ Investors and its employees have been involved in impact investing since 2008, and this experience led us to the creation of the Positive Impact Portfolios in 2012, with the objective of making impact investing available to mainstream investors.
Since then, EQ Investors has built out its sustainable investing capabilities. We launched the EQ Future Leaders MPS range in early 2020, a passive sustainable proposition. We also offer bespoke sustainable investment services tailored to specific client sustainability and financial objectives.
We are a team of 13, comprising:
Additionally, we are supported by operations and platform administration team (4 people), marketing (3), and an internal IT team (4 people).
All the fund and asset allocation research is carried out internally, but we have access to external data providers to provide research data input.
Given that EQ is a sustainable investment manager, our sustainable investment approach is fully integrated across our research process to avoid over-reliance on key individuals. Therefore, all members carry out relevant aspects of sustainability research, integration or engagement. In addition, all EQ fund analysts are actively contributing to the ESG assessment, fund monitoring and implementing the sustainability objectives of our portfolios.
A dedicated Board Report is produced that summarises key innovations, proposes changes and keeps the bridge between implementation and oversight. There is a Sustainability Oversight Committee (SOC) which acts as a quarterly forum to monitor, at a higher level, that all of EQ’s sustainability claims are met, that EQ aligns to the changing regulatory demands and remains at the forefront of sustainable investment innovation. While our dedicated sustainability team stays ahead of incoming regulation, industry frameworks and client expectations to manage this over the long term, the SOC provides the appropriate governance structure. Beyond its monitoring responsibility, the SOC aims to for members to be able to openly discuss “conflict of interest”, “mandate drift”, and any proposed innovations.
Affiliations: UN PRI, CA100+, ShareAction, Access to nutrition, World Benchmarking Alliance, Access to Medicine, UN PRI Spring, B Corp
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DialshifterThis portfolio is helping to ‘shift the dial from brown to green’ by… The EQ Positive Impact Portfolios have been designed with a view to support companies that are developing innovative solutions to tackle the largest issues the world is facing including climate change. By supporting the issuance of green bonds, financing of low carbon solutions as well as engaging with companies to push them to reduce their carbon emissions, the EQ Positive Impact Portfolios are sharing the ethos of the Dialshifter to make the fight against climate change a high priority for all stakeholders.
Our organisation is helping to support the Paris Climate Agreement and the Race to Net Zero by… Being a signatory of the B Corp Climate Collective NetZero 2030 initiative, EQ Investors has committed to net zero emissions by 2030. EQ wants to accelerate the reduction of greenhouse gas emissions to reach a 1.5-degree trajectory leading to net zero by the year 2030—20 years ahead of the 2050 targets set in the Paris Agreement. EQ Investors has also joined the influential Climate Action 100+ group of investors. The initiative is aimed at pushing the world’s largest corporate greenhouse gas emitters to take action on climate change. |
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Literature
Last amended: 31/01/24 06:59 |
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