RASS study identifies high revenue impact correlation of KBIGI natural resource strategies’ constituent portfolio holdings to UN sustainable development goals

News Release, Monday 28 October 2019

RASS study identifies high revenue impact correlation of KBIGI natural resource strategies’ constituent portfolio holdings to UN sustainable development goals

Specialist institutional asset management boutique KBI Global Investors aligned its investment strategies with the UN Sustainable Development Goals – which set 17 goals and sub targets for the eradication of poverty and hunger, the protection of the environment, the provision of clean water and sanitation, and prosperity for all – from their introduction in 2015. In March last year, with growing numbers of investors looking to achieve Impact through public equities, the firm announced that it had quantified the revenue impact of constituent holdings in each of its Natural Resource strategies to the SDGs – and it remains one of a very small number of managers with this capability. KBIGI today published the findings of its RASS (Revenue Alignment SDG Score) research study and its impact measurement scores for 2018¹.

Eoin Fahy, Head of Responsible Investing at the Dublin-based firm said that as its suite of Natural Resource strategies invest in companies providing solutions to the global shortages of clean water, energy and food, it was in no way surprised that these portfolios have a high level of Impact – particularly in the areas of energy and climate change, water and food/hunger. Rather than having an anecdotal sense that investments in these strategies contribute to the achievement of the SDGs, it is, an important breakthrough in that we have been able to quantify the Impact of our investments in a replicable and transparent methodology, said Eoin.

The firm’s Global Resource Solutions strategy, a combination of three specialist strategies (namely Water, Energy Solutions and Agribusiness), showed a particularly high RASS score of almost 76%*, i.e. that percentage of total revenues were contributing to the achievement of the SDGs. (* Net figure allowing for the negative contribution number of 1.4%).

 

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The SDGs to which the portfolio contributes most are SDG 2 (Zero Hunger), SDG 6 (Clean Water and Sanitation), SDG 11 (Sustainable Cities), SDG 7 (Clean Energy) and SDG 9 (Industry, Innovation and Infrastructure).

Methodology
KBIGI calculates the percentage of each investment portfolio’s revenue that is aligned with the SDGs, taking the total amount of revenue earned by the companies in their portfolios and allocating that revenue to various business activities. Then for each business activity, it decides whether that activity has a positive, neutral or negative impact in achieving the SDG, calculating on a weighted basis the percentage of any portfolio’s revenue (i.e. sales) which is positively or negatively contributing to the achievement of those goals.

Global Sustainable Infrastructure Strategy has highest Impact correlation
The firm’s Global Sustainable Infrastructure Strategy delivers the highest RASS score of all, with 82.5% of the revenue attributable to the portfolio directly supporting the SDGs – SDG9 showing a 40% revenue to Impact correlation.

Commenting on the findings, Eoin Fahy, Head of Responsible Investing at KBI Global Investors said, We are delighted to be able to quantify the impact score of our portfolios (‘RASS’) in this unique and proprietary way. We haven’t seen any other studies that directly measure the revenues of portfolios to the UN SDGs and believe we are one of the few managers to measure and account for a negative element within our RASS score.

This year we have added numerous new business activities – and interestingly, from our annual review, have started a number of new engagements with some of our companies. However, most important are the actual RASS results themselves and to have portfolios with scores in the 75% plus range is incredible. As investors’ appetite for high impact strategies continues to surge it is gratifying to be in a position to offer them a range of KBIGI strategies that deliver significant and measurable impact in such a clear and transparent way.

– ENDS –

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¹ Based on holdings in the portfolios concerned at the end of December 2018.

Journalists seeking further information should contact:
Gordon Puckey
Phoenix Financial PR
+44 7799 767 468
gordon@phoenixfinancialpr.co.uk

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NOTES TO EDITORS

1. RASS scores for other KBI Global Investors Natural Resource strategies

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2. KBI Global Investors (‘KBIGI’) and Natural Resource strategies
One of the firm’s principal goals is to be first to market with value-adding investment themes of the future. In the late 1990s, KBIGI was amongst the earliest investors to recognise the inherent source of alpha from investing in companies providing solutions to sustainability challenges related to the provision of food, energy, water and the mitigation of and adaptation to the impacts of climate change.

Having identified a compelling clear need for investment in companies providing solutions to the global shortages of clean water and energy, the firm launched strategies first in these areas in 2000. Building up its team and intellectual capital in these themes, KBIGI added a climate change strategy in 2007, a sustainable impact agribusiness (food) strategy in 2008 and a sustainable impact infrastructure strategy in 2017.

3. About KBI Global Investors
Established in 1980, KBI Global Investors is a specialist institutional asset management boutique, offering a range of Global Equities and Natural Resources strategies. The firm manages assets for a broad range of clients – public and corporate pension schemes, sub-advisory investors, foundations and endowments, wealth managers, private banks and investment intermediaries included. KBIGI enjoys an increasingly global client base and today holds mandates in the UK, Europe, North America and Asia. Part of Amundi, the firm is headquartered in Dublin, with additional offices in Boston, Massachusetts.

Originally focused exclusively on the Irish market, managing predominantly domestic balanced mandates, KBIGI continues to manage pension fund assets for some of Ireland’s largest and best-known corporations; today the firm enjoys significant coverage across the global institutional consultant community, offering investment services on both a segregated and unitised basis.

KBIGI boasts a track record of delivering consistent and outstanding risk-adjusted investment performance over the longer term, its highly experienced investment team today managing €11.5bn. (This is the combined AuM of KBI Global Investors Ltd and KBI Global Investors (North America) Ltd as at 30th September 2019).

The firm is headed by CEO Sean Hawkshaw, with members of the KBIGI team holding 12.5% of the equity in the firm.

www.kbiglobalinvestors.com

Disclaimers
This award was made to KBI Global Investors on an independent basis with no involvement or prior knowledge of the award by KBIGI. No compensation was paid to the award provider by KBIGI for consideration or selection. KBIGI is not privy to the selection process and therefore cannot verify the basis on which awards are granted; however, the award provider can be consulted for further information. Past performance or the receipt of an award does not indicate any level of skill or future performance.
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KBIGI – RASS scores, 28 October 2019_compliance approved