Impact Investments
Our clients wish to invest their funds in a way that achieves real impact and generates real, market rate returns.
We share their passion and make this possible. On behalf of our clients, we invest in companies that contribute to the development of a global economy that works for more people. Investors’ capital can fuel well-conceived business plans for not only their own benefit, but for that of the businesses’ employees, customers and owners. These companies may contribute to a cleaner environment, a lower carbon economy, more financial inclusion, greater food security, healthier lives, or a variety of other impactful outcomes.
Each client has different passions and we take pleasure in tailoring investment portfolios that have impact aligned with each client’s unique passions. We invest with an eye to the impact of choice, whether overseas or domestic, in public or private investments, active or passive, all while targeting competitive returns. A portfolio company’s profitability both sustains the impact into the future and helps our clients achieve their financial goals.
The United Nations has identified 17 Sustainable Development Goals for social and environmental impact. We use the SDGs framework to target impact for our investors.
(click here to link to the UN Sustainable Development Goals page)
No Poverty
“No Poverty” is stated goal #1 of the SDGs and aspires to end poverty in all forms and dimensions by 2030. Between 1990 and 2015 the number of people living in extreme poverty declined by more than 50%, even though the world population continued to expand. But 736 million people still living on less than $1.90 is unacceptable. South Asia and sub-Saharan Africa account for 80% of global poverty today. Investment dollars flowing to these regions and to the right types of investments – affordable housing, education, agriculture, financial access – will have the potential to really move the dial and get us closer to poverty eradication.
Zero Hunger
“Zero Hunger” is SDG #2. Of course, this is closely linked to SDG #1 “No Poverty.” We see investment dollars as having particular impact in the agricultural sector. What makes this goal more challenging, is climate change. Investing in agtech in developing countries is an area that holds particular promise. Specifically, Africa which still has the ability to expand agricultural land, will be fertile ground to test & develop more sustainable agricultural practices.
Good Health
“Good Health and Well-Being” is SDG #3. This goal is not only an issue in developing countries but is acute in the United States as well. We are particularly interested in investments that lower the cost and improve the access to quality care. In the United States, medical access in rural areas is deteriorating. Companies engaged in telemedicine, patient education, and self-care, could prove interesting and impactful investments.
Quality Education
“Quality Education” is SDG #4. In the United States, we have some of the best institutions of higher learning in the world. Yet our K-12 system has an unacceptably wide range of quality and outcomes. Many students are stuck in sub-standard programs, while others graduate equipped to compete with the best & brightest on a global basis. For profit schools are no panacea to our educational challenges. However, in places like Africa, where often there are no viable public options, for profit schools are filling the void. Not all are serving their students’ best interests, to be sure. But seeking out those that do, can make for impactful investments.
Gender Equality
“Gender Equality” is SDG #5. At JPS we are able to screen our investable universe on the basis of gender diversity. It is important to look beyond the C-Suite. What does the diversity of upper/middle management look like? What compensation disparities might exist? What type of family benefits do companies provide? When investing in US stocks, it is quite feasible to perform this type of analysis. Outside North America and Europe, it becomes more challenging.
Clean Water and Sanitation
“Clean Water and Sanitation” is SDG #6. Water scarcity affects more than 60% of the world population. Climate change could make this problem even worse. There are opportunities to invest in water treatment, efficient distribution, and conservation, throughout the world. Investing in sustainable agriculture is another avenue of impact that would move the dial for SDG#6. There are too many inefficiencies, in the current food production system. That is as true in the United States, where we grow rice and almonds in the increasingly water-scarce California Central Valley, as it is in India, where farmers receive subsidized electricity, which leads to overexploitation of groundwater. The good news, is that there are plenty opportunities for impact investors to be part of the solution to the looming water crisis.
Renewable Energy
“Affordable and Clean Energy” is SDG #7. It is well understood that the (speedy) transition to a cleaner energy infrastructure is the key to avoiding the worst impacts of climate change. It is the challenge of our lifetimes. There are plenty of opportunities to invest in clean energy both through public and private securities and across the value chain from generation to distribution to enabling technologies. At JPS we run various investment strategies in the clean energy space, including the Green Economy strategy, Green Income strategy, and Emerging Markets Fossil Fuel Free strategy.
Decent Work & Economic Growth
“Decent Work and Economic Growth” is SDG #8. Sustained, inclusive, and sustainable economic growth drives progress, creates decent work for all and improves overall living standards. There are many opportunities to invest in companies that promote youth employment and for female-owned businesses as well – people need jobs. Investing in fair treatment and equal opportunity will contribute to job growth. Look to invest in companies that fosters community support, personal security, innovation, and employment. Finally, services focusing in basic energy, tech, transportation, and education are critical. These highlight the interconnectedness of many of the SD Goals.
Industry, Innovation and Infrastructure
SDG#9 is “Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation.” The percentage of workers employed in manufacturing activities has held steady since 2000 at about 14%. With the Biden Administration’s proposed Infrastructure Bill having a broad definition of Infrastructure, many opportunities exist for investors. From traditional infrastructure business such as roads and transportation, to internet related companies, to companies looking to reduce their carbon footprint and emissions, the investment opportunities are abundant. Investment in infrastructure and innovation are key to finding solutions to both economic and environmental challenges that stand the test of time.
Reduced Inequalities
“Reduced inequalities” is SDG#10. The focus on this SD Goal is reducing inequality within and among countries. While the sheer number of people living in poverty has decreased since 2000, the benefits have been concentrated in few countries, and primarily amongst in the already advantaged groups. Too many in the US and in the global population have been left behind. Recent evidence suggests that access to financial services for people across the socioeconomic spectrum works to reduce overall wealth inequalities as both new entrepreneurs and wage earners benefit. Investment in education and healthcare services will reduce and reverse these cycles of poverty. Look for investment opportunities in companies that allow for individual and community growth; companies that give the ability for people to provide for themselves.
Sustainable Cities and Communities
“Make cities and human settlements inclusive, safe, resilient and sustainable” is SDG#11. This goal is all about managing urban development. Cities account for 65% of the world’s energy demand. This demand translates to 70% of energy-related CO2 emissions globally, making urban areas major contributors to climate change. But these urban areas can also allow for gains in innovation and prosperity, as well in sustainable development. Finding companies to invest in that provide access to safe housing as well as organized transportation that is safe to the environment, that minimizes the impact of natural disasters support this goal. Companies that consider their waste management and air/water pollution reduces their contribution to climate change. Countries like the Netherlands invest more than a billion dollars a year to manage their flood infrastructure. This technology and thinking can be brought to the US.
Responsible Consumption
SDG #12 is “Responsible Consumption”. Businesses can benefit from inventing new solutions that enable sustainable consumption and production patterns. When the companies have a better understanding of the environmental and social impacts of their products and services, they will help people to change their lifestyle to be more sustainable. Investing in fair trade companies is a great way to do this. Another example is providing clean-burning cookstoves can help make the consumption of energy by the 40% of the global population that relies on coal or similarly dirty fuels for cooking (and heating). The cost of not doing this leads to climate change and the degradation of our environment.
Climate Action
“Climate action” is SDG #13. Companies must take urgent action to combat climate change and its impacts. Environmental activist Dr. Vanadana Shiva states “Climate change is not just a problem for the future. It is impacting us every day, everywhere.” This is more than just an environmental issue – droughts cause the loss of land for agriculture; access to clean drinking water is becoming harder to sustain. Look at the loss of the Colorado River basin and the impact on the water supply and quality, hydropower and recreation. Fighting climate change is imperative for sustainable development.
Life Below Water
SDG #14 states: “Conserve and sustainably use the oceans, seas and marine resources for sustainable development”. Plastic production has increased from 2.3 million tons in 1950 to 448 million tons in 2015 with production expected to double by 2050. We’ve all seen the Great Pacific Garbage Patch – 1.6 million square kilometers (twice the size of Texas) of plastic pollution. Finding companies that innovate ways to clean this is an obvious choice for investment, but simpler things as sustainable drink-, cook- and kitchen-wares, as well as homewares all make an impact. Even Coca-Cola and Aramark are utilizing their platforms to reduce single-use plastic waste. This leads to the development of sustainable renewable resources while reducing fossil fuel usage.
Life on Land
“Life on Land” is SDG #15 – “Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss.” This is the sibling of SDG#14 and related to gender politics, the impact on indigenous peoples, and health and biotechnology. Companies who engage in deforestation and other harmful practices leads to arable land loss. Instead, sustainable agricultural practices need to be adopted by farmers and companies that produce farm-related products. Medical products and cosmetics companies both also depend on healthy ecosystems.
Peace, Justice and Strong Institutions
SDG #16 – “Peace, justice and strong institutions” (Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels.). Costa Rican Nobel Laureate and Politician Oscar Arias Sanchez states “Justice and peace can only thrive together, never apart”. We depend on our government to have laws that are dynamic and current. However, governmental (and institutional and business) corruption exist. WE must hold governments and businesses accountable. Food companies need to innovate to reduce malnutrition and provide healthier nutrition choices. Businesses, along with government, need to provide access to adequate housing and living conditions, healthcare and education, This is really the foundation all the other SDG’s.
Partnerships for the Goals
The last of the SDG’s – SDG #17 is “Partnership for the Goals. This recognizes the need to implement and revitalize global partnerships that support sustainable development. Look to invest in information and communication technology (ICT) based services, systems, and companies. Just look at how mobile phones, and the impact on e-finance and e-health, has changed access to financial institutions and healthcare clinics. We need to build the capacity to support these technologies, as well as methods to provide better monitoring and accountability.