How does Impact connect with the Public Markets?

At Reynders, McVeigh Capital Management, we believe that public equities hold significant potential to drive sustainability and social good. Our approach does not subscribe to the traditional sustainable investing paradigm. We don’t stop at basic negative screening that excludes so-called “sin stocks.” Instead, we focus on companies that are positioned for the future economy.

This perspective helps us consider liabilities and uncover opportunities away from the herd, as we assess risk through a long-term lens. We invest in companies that bring solutions to the world’s challenges, conduct business responsibly, and consider all stakeholders: employees, customers, the communities in which they operate, and the planet as a whole.

Investing in the public markets is no longer an exercise in straight numbers. The complexities of the globally intertwined economic landscape combined with the nuances of our greatest challenges (i.e., climate change and significant social issues) create the opportunity to seek financial returns while also making a positive impact. This calls for a deep dive into quantitative and qualitative factors for each potential investment.

 Here’s how investing in the public markets can make an impact:

The Power of Public Markets

Public markets involve vast amounts of capital, which can be channeled to promote responsible corporate behavior and sustainable business practices. We conduct thorough due diligence that encompasses financial fundamentals and sustainability factors. This rigorous process helps identify companies with strong environmental, social, and governance practices that may provide competitive advantages and mitigate potential liabilities.

Our investment strategy focuses on "double materiality," which considers both the impact of external factors on a company and the company’s impact on its ecosystem. By investing in thoughtfully researched organizations that prioritize non-financial criteria like resource management, human rights, and fair wages, investors play a role in advancing better societal outcomes without sacrificing potential returns.

Thematic Investing

Our investment themes are centered on critical sectors that are vital for a sustainable future: 

Energy Transition: Investing in companies that facilitate the shift from fossil fuels to renewable energy sources, supporting the broader electrification of various industries. 

Manufacturing Automation: Focusing on companies that enhance productivity and efficiency through automation, leading to both economic and environmental benefits.

Water Resources: Prioritizing investments in companies that address global water shortages through innovation, infrastructure, and conservation efforts.

Healthcare Access: Supporting companies that improve healthcare accessibility and quality, contributing to healthier communities and better quality of life.

Shareholder Advocacy

Investing in individual securities also provides us the opportunity engage in shareholder advocacy. Our work in this arena helps drive change in corporate behavior that hurts financial performance or creates significant negative societal impacts.

We leverage our voices by engaging with corporate leaders directly, voting our clients’ proxies, submitting shareholder proposals, participating in industry peer groups and networks, and fostering dialogue with our community.

Shareholder advocacy initiatives have, for example, led to progress in corporate lobbying and political spending, diversity, equity, and inclusion, and CEO compensation.

Advancing impact

Investing in the public markets offers a powerful avenue to create positive change. By aligning investment strategies with sustainability goals, investors can contribute to a more equitable and environmentally responsible future while also prioritizing financial returns.

At Reynders, McVeigh, we are committed to making every investment an opportunity to drive impact and support the transition to a sustainable global economy.

For more detailed insights and to explore our investment strategies, you can read the full 2024 Impact Report.

DISCLOSURE: The views expressed above are subject to change and represent the current, good-faith views of Reynders, McVeigh Capital Management, LLC (“we”) at the time of publication. References to specific impact investments are not intended to be, and should not be interpreted as, solicitations, recommendations, or investment advice. The commentary provided herein is educational in nature. All data is based on current, public information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied on as such.

The investment themes identified above represent a selection of our current investment recommendations on behalf of our advisory clients. They have been selected by the authors on an objective, non-performance-based basis to illustrate the views expressed in the commentary. The reader should not assume that investments in these types of investments, sectors, and/or manners discussed were or will be profitable. Past performance is not an indication of future results. Investment decisions should always be made based on an investor’s specific needs, objectives, goals, time horizon, and risk tolerance.

Certain impact investments are private, non-public offerings that are only available to accredited investors (individuals or business entities that are allowed to trade securities that may not be registered with financial authorities due to their income, net worth, asset size, governance status, or professional experience). These private, non-public offerings may experience greater volatility than traditional investments in publicly traded securities. Advisory clients should carefully review the pertinent documents for each impact investment for a more detailed discussion of the associated risks. Given the high-risk nature of impact investments, advisory clients should contact their portfolio manager to discuss risks and suitability prior to investing.