31 - Impact investing through the eyes of an institutional money manager

The Impact Investing Podcast

I have spent well over two decades working in the investment management industry. For the vast majority of that time, ESG and responsible investing toiled in obscurity and dismissed as the pursuit of impractical idealists. However, in recent years we reached a tipping point and the industry is racing to get in on the action by overhauling its marketing and sometimes even its investment processes.

These days you would be hard-pressed to find an investment manager that isn’t claiming to be incorporating ESG considerations into its processes. And there are plenty of investment managers quick to claim to be doing impact investing.

The trouble is, there’s a big difference between making investments that have an impact (all investments have some impact) and doing legitimate impact investing. The reason so few large money managers are doing real impact investing is because it’s harder, more time-consuming, often offers less liquidity, and doesn’t have the necessary scale.

In this episode of the podcast, I sit down with Andrew Parry, Head of Sustainable Investing and Newton Investment Management out of London, U.K. With roughly $60 billion in assets under management, Newton is a boutique investment management business that is one of eight asset managers owned by BNY Mellon Investment Management. Under Andrew’s leadership, the firm has put responsible and impact investing at the heart of its philosophy and approach.

Andrew has spent his career in investment management across a variety of respected asset managers including Hermes, Lazard Brothers, and Julius Baer, and Baring Asset Management. Parry is also a member of the CFA UK’s Committee for Diversity & Inclusion.

During the episode, we discuss how Andrew sees ESG investing versus impact investing, how he weaves an SDG focus into the firm’s investment process and product creation, the change in demand for responsible investments in recent years, and why he views every business as a de facto social enterprise. We also get into the age-old debate of whether responsible investing leads to lower future returns. And be sure to stay tuned to the very end where Andrew discusses his outlook for the investment industry headed over the next decade

Resources from this episode:

• Newton Investment Management’s Website
• Newton’s Statement of Purpose
• Newton’s Responsible Investment Policies & Practices
• Follow Andrew on LinkedIn

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