Investment firm becomes first in Canada to shed light on 'gray areas' of assessment within all its portfolios
To increase transparency on the overall impact of its investments, Genus Capital is introducing a new standardized Net Impact Score to its portfolios.
A first for investment firms in Canada, the unified scoring system offers a more granular view into impact portfolios by highlighting “gray areas,” individual investments that can have both negative and positive impacts on the world.
Under Genus’s scoring system, the impact of a company product or service is rated based on the UN Sustainable Development Goals. The weighted average impact (positive and negative) revenue of the holdings are determined to get a net impact score.
“It is the net impact of portfolios that really matters,” said Mike Thiessen, partner and director of Sustainable Investments at Genus Capital. “Investors that want a positive impact need to not only increase the ‘good’ investments, but they need to decrease the harmful investments as well, to ensure the overall impact aligns with their values.
By calculating the size of both harmful and beneficial effects, the system is able to produce a single metric to determine the Net Impact score of a portfolio. With the increased transparency of such scores, Canadians can better align the overall impact of their investments with their values.
“We are proud to be the first investment management firm in Canada to integrate Net Impact Scores across all of our impact funds,” Thiessen said. “This will give investors greater insight into the impact of their portfolios and allow clients to achieve their impact goals.”
Under the firm’s scoring system, the Genus Fossil Free High Impact Equity Fund registers a net impact of 57%, compared to -0.5% for its benchmark, the MSCI World index.