Specialist sustainable investing boutique WHEB Asset Management has unveiled a calculation of the positive environmental impact of every £1m that its Sustainability fund invests into the equity market.
The data is revealed in the group's third annual Impact Report for the £154m FP WHEB Sustainability fund, which solely invests in companies providing solutions to sustainability challenges.
Managing partner George Latham said: "Our experience is that investors of all types are increasingly interested in the purpose of their investments, and want to understand the impact of their savings and investments on the wider world."
According to WHEB's calculations, investing a £1m investment from the fund in 2016 resulted in 1,200 MWh of renewable energy being generated; 1,600 tonnes of CO2e was avoided; 1.6 million litres of waste water was treated; 30 million litres of drinking water was provided; and 140 tonnes of waste material was recycled or recovered.
The basis of WHEB's calculations come from recommendations from the Task Force on Climate-related Financial Disclosures (TCFD), led by the governor of the Bank of England Mark Carney and Michael Bloomberg, and the UN Sustainable Development Goals (SDGs).
WHEB's Impact Report details how all the fund's investments directly support the attainment of the seven UN SDGs, and the group said it is one of the world's first investors to report against the framework suggested by the TCFD.
The firm's head of the research Seb Beloe said one of the challenges comes because individual investee companies report their own impact in different ways, so WHEB tried to take a standardised view across the portfolio.
He said: "We have also tried to be very fair in working out the positive impact -we did not want to exaggerate the impact. Our investors have an honest view of what the underyling companies in the portfolio are achieving."
In the future, the group will also develop ways of measuring social impact in addition to environmental impact, which is a greater challenge because of the lack of any established framework in this area.
Over the last two years there has been an increasing diversification of the fund across the nine investment themes which are resource efficiency, cleaner energy, sustainable transport, environmental services, waste management, health, safety, well-being and education.
Companies in the portfolio are linked to at least one of WHEB's themes ,and about 80% of the aggregated revenues of the fund's investments are from theses selected themes.
Back in 2014 the smallest five themes accounted for a fifth of the fund's investments, and this rose to a third by the end of 2016 with greater allocations to the likes of education.
Part of the reason behind the shift in the portfolio is driven by the success of the resource efficiency sector, which has changed the prospects for many commodity markets and, therefore, it has reduced exposure to areas like to recycling from 17% in 2014 now to 2016.
The fund's assets under management rose 51% in 2016 to £124m and as at the end of April it stood at £154m.
The impact investment sector globally has around $100-$150bn of assets under management defined this way, a figure which is doubling every year.
Unclear on job moves
Reforms not enough
McGhee joins from banking trade body
Our video series continues
In June 2016, immediately before the Brexit referendum, a curious thing happened.