Dimple Sahni

Managing Director Multi-Asset Impact

Johanna Brenninkmeijer

Managing Director Multi-Asset Impact

Diana Wesselius

Managing Director Multi-Asset Impact

Impact investments, as defined by the Global Impact Investing Network (the GIIN) in 2009, “are investments made into companies, organisations and funds with the intention to generate measurable social and environmental impact alongside a financial return.


In 2023, we are pleased to report that 100% of the multiasset impact portfolio was allocated to funds that either benefit stakeholders or contribute to environmental and societal solutions, based on the Impact Management Project (IMP) methodology. See Figure 23. This aligns with the portfolio’s objective to generate positive, measurable social and/or environmental impact alongside market-rate financial returns.


Using our RI Scorecard, we assessed all the funds within our portfolio and noted significant improvements in the integration of ESG criteria by fund managers. Many managers progressed from being professionals to leaders in ESG integration, reflecting our ongoing efforts to promote and support high standards of RI practices. See Figure 22.

Real assets allocation and Africa infrastructure focus

One of the key developments in the year was our investment in an infrastructure fund in Africa, aligned with our strategic asset allocation which includes a real asset component in our multi-asset impact portfolios. This decision was driven by several factors:

Need for solutions

  • Africa’s significant infrastructure deficits are a key bottleneck for socio-economic development on the continent, necessitating innovative finance solutions, which this fund aims to provide.

Geographical focus

  • The fund’s primary focus is Africa, where we wanted to address our underweight positioning to this region.

Diverse portfolio

  • The fund’s portfolio provides exposure to a variety of infrastructure projects, such as solar energy, cold storage facilities, telecom towers, and transportation corridors.

Infrastructure over renewable energy

  • While renewable energy investments are valuable, our choice for a fund investing in broader infrastructure was influenced by the perceived higher risk of investing in a focussed energy strategy in Africa, and the wish for diversification beyond energy only. The fund that was added to the portfolio has been selected based on the fund manager’s track record, their leadership in implementing ESG in their processes and in their engagements with the portfolio companies, their ambition to reduce carbon emissions in each of their investments, and the fund’s presence throughout the region.

Size and influence

  • We excluded investments over 1 billion euros in size to maintain a level of influence over the projects.

At the end of Q1 2024, the fund had invested in five notable projects: an integrated energy company in South Africa, a logistics company improving amongst others border crossing efficiencies in the Southern Africa region, a rural-urban road upgrade project in Kenya, a cold storage platform in South Africa and Namibia, and a telecom tower platform with operations in Nigeria and Congo. All these projects highlight the fund’s potential for significant positive impact in regions with substantial infrastructure needs.

Impact measurement: achievements and challenges

We made progress in further defining our philosophy regarding the SDGs and sustainability outcomes. After initiating this project last year, we concluded that for a multi-impact and multi-asset impact strategy, the SDGs are output-agnostic. Therefore, we aim to fully invest in line with our three core values and are working to define concrete impact metrics that are both measurable and in alignment with our values.


Our engagement with fund managers, guided by the SFDR Article 9 requirements, aims to ensure they strive to be best-in-class while acknowledging the unique challenges faced by smaller funds. Principal Adverse Impact (PAI) statements, a regulatory requirement under the SFDR, have been instrumental in enhancing transparency regarding the negative effects of investment decisions on sustainability factors.


Despite the successes, several challenges remain in unlisted markets, particularly in developing economies. As an example, smaller private asset funds often lack comprehensive data, making it difficult to estimate emissions data across asset classes. To address this challenge, we are beginning to work with our managers on using proxy metrics that could add further insight.

Understanding impact on the ground in Asia

In 2023, the team travelled to Asia to attend several Limited Partner Advisory Committee (LPAC) meetings hosted by underlying impact managers based there. For one of these, the fund’s Annual General Meeting (AGM) provided real-world insights into the portfolio across various themes including financial inclusion, healthcare, education and logistics and distribution. After engaging with all the portfolio companies in the fund, we conducted several site visits to understand the impact being generated on the ground:


Evermos, a Muslim values-aligned social commerce platform that empowers local SMEs in lower-tier towns using a reseller-centric model to promote and sell products listed on the platform. The company received the 3G Excellence in Women Empowerment Award 2023 and also received the Asia Pacific Stevie Award for Excellence in Social Impact.

Ricult is an innovative agricultural platform that provides in and pre-harvest financing to farmers, improving their access to credit and resources, thereby enhancing agricultural productivity and supporting sustainable livelihoods.


For the year 2022, this fund reported the following impact outcomes: over 10,000 farmers gained access to finance and technology, over 4,000 low-income individuals achieved access to healthcare, and over 107,000 entrepreneurs gained access to a commerce platform that enabled them to earn a livelihood and increase their incomes.26

ESG and IMP assessments


O

ESG assessment

Leader

83.0%

Professional

15.0%

Novice

2.0%

Laggard

0%

Not Reviewed

0%


O

IMP assessment

Acts to avoid harm

0%

Benefits stakeholders

33.5%

Contributes to solutions

66.5%

May/Does cause harm

0%

Not Reviewed

0%

26Information available on request.

Next page

Underlying assets