We continue to evolve our impact investing approach in response to major trends, with a particular focus on access to health care, the intensifying impact of climate change, and the accelerating shift to digital ways of working and living.
As communities increasingly see the value of solutions that benefit people and the planet, companies and issuers are incentivized to innovate. The result is an expanding impact opportunity set. We believe our approach of investing across 11 impact themes puts us in a strong position to capture promising new developments across developed and emerging markets. We are honored to play a role in growing the impact ecosystem with your support.
What follows is a short summary of key components of this year’s full report.
Read the full report >
Tara Stilwell, CFA Portfolio Manager, Global Impact Fund
Campe Goodman, CFA Portfolio Manager, Global Impact Bond Fund
Liliana Castillo Dearth Portfolio Manager, Emerging Markets Impact*
*Wellington does not currently offer an Emerging Markets Impact UCITS Fund, but we include the perspectives of the portfolio manager as the research insights from the Emerging Markets Impact Team benefit the entire impact platform.
Investments in our Global Impact and Global Impact Bond Funds:
Supplied or financed more than 14 million units of affordable housing
Protected over 86 million businesses or individuals with cybersecurity tools and technologies
Enabled digital access for over 1.6 billion people in developing countries
Provided education, training, and career support to more than 55.5 million people
Generated 298 TWh of renewable energy, enough to eliminate more than 129 million tonnes of GHG emissions and power 16 million homes**
Supplied health care products and services to over 141 million patients
Avoided 414 million tonnes* of greenhouse gas (GHG) emissions through improved resource efficiency
Provided or treated more than 147 billion cubic meters (m3) of water
14 million Financed more than 14 million units of affordable housing
141 million Supplied health care products and services to over 141 million patients
147 billion Provided or treated more than 147 billion cubic meters (m3) of water
86 million Protected over 86 million businesses or individuals with cybersecurity tools and technologies
1.6 billion Enabled digital access for over 1.6 billion people in developing countries
55.5 million Provided education, training, and career support to more than 5.5 million people
414 million Avoided 414 million tonnes** of greenhouse gas (GHG) emissions through improved resource efficiency
16 million Generated 298 terawatt-hour (TWh) of renewable energy, enough to eliminate more than 129 million tonnes of GHG emissions and power 16 million homes
*Throughout this report, unless otherwise indicated, we use tonnes for metric tons. | **Our 2020 report stated that the funds generated over 5,389 TWh of renewable energy for the year. Due to a calculation error, this figure was overstated. The actual amount generated was 1,006 TWh. | All investing involves risk. Investors should consider the risk that may impact their capital, before investing. These impact highlights relate to our impact equity and impact bond approaches. The value of your investment may become worth more or less than at the time of original investment. Please refer to the Important disclosures at the end of this document for more information.
Impact measurement and management (IMM) is a core component of our investment process, critical for evaluating a company's or issuer’s holistic impact. In 2021, as data availability expanded, industry standards improved, and interest in impact investing accelerated, we meaningfully built out our existing IMM processes. In April 2021, Wellington hired an IMM Practice leader who serves as a dedicated resource focused on ensuring consistent, high-quality impact data and analysis.
The IMM Practice team has worked to enhance existing approaches, for example, developing a new framework with the impact bond team to analyze impact risks and opportunities in multilateral development banks. Finally, the IMM Practice took an active role in company engagements, deepening our insights into how products and services contribute to our impact themes and sharpening discussions with management teams about how companies measure the positive and negative social and environmental outcomes.
We believe partnership and engagement with companies and issuers can enhance positive social and environmental impact and create lasting value for our clients. Through active ownership and multidisciplinary research, we seek to support our theory of change. In 2021, engagement remained a vital part of our investment process. The impact equity team held 224 engagements with 80 portfolio companies and 65 additional engagements with potential candidates for the portfolio. This was a 90% year-over-year increase.
The topics covered ranged from companies’ methods of support for their communities, employees, and customers to broader social and environmental themes. Our engagements provide valuable and additive insight into companies’ strengths and weaknesses. These discussions also help us confirm companies are delivering impact and have the potential to generate strong long-term financial returns.
We continue to evolve our research in emerging markets where we see significant scope for impact investing to help address unmet needs. Specifically, we find a growing range of innovative companies domiciled in emerging markets, whose core goods and services address large social and environment challenges across our Life essentials, Human empowerment, and Environment categories.
Through active ownership and multidisciplinary research, we seek to support our theory of change.”
While we currently do not offer an emerging markets UCITS vehicle, the “grassroots research” approach that Portfolio Manager Liliana Castillo Dearth undertakes in emerging markets benefits our wider platform, through Liliana’s participation and leadership in the Impact Steering Group (ISG).
In 2015, we launched our first impact approach, aimed at addressing themes related to Life essentials, Human empowerment, and Environment. The development of our themes took extensive research and consultation, as we sought to identify the key forces driving the just transition to a more socially and environmentally sustainable future.
When the United Nations Sustainable Development Goals (SDGs) were adopted, we were pleased to see how closely our themes aligned.
We support the 17 SDGs and believe the financial services industry has an integral role to play in bridging the funding gap to achieve them. While we invest in companies and issuers that align directly with our proprietary impact themes, we also denote the relevant goal and specific target to which they contribute to better contextualize their activities, as illustrated on the following page.
Company/Issuer overview
International provider of photovoltaic solar energy solutions
Impact theory of change
The issuer’s differentiated technology in photovoltaic solar modules diversifies the global energy mix, delivers a lower-cost alternative to utility customers, and reduces the negative environmental impact from fuel use by displacing CO2 emissions.
SDG target
7.2 – By 2030, increase substantially the share of renewable energy in the global energy mix
International provider of professional, medical, industrial, and commercial products and services spanning life sciences, diagnostics, and environmental and applied solutions
The issuer facilitates the development of innovative medical technologies that allow researchers and clinicians to create and administer lifesaving treatments, improving patient outcomes.
3.B – Support the research and development of vaccines and medicines for the communicable and non-communicable diseases that primarily affect developing countries, provide access to affordable essential medicines and vaccines, and provide access to medicines for all
Wellington determines the goals and targets that, in our view, each portfolio company or issuer is aligned with. Language for the goals and targets has been abbreviated, but not otherwise altered, from UN.org. Wellington Management supports the United Nations Sustainable Development Goals. | Sources: Wellington Management, UN.org
