In the report
4. Engagement with the process
Few applications directly engaged with future generations and young people
Promoting greater participation in investment processes was a core principle of the EIC. This was a unique investment tender process – a handful of ISPs engaged with that creatively (see below) while many applied with their most relevant existing product.
The RFP stated: “We recognise that investment decisions made today will have the greatest impact on future generations, and those from marginalised backgrounds are more likely to be adversely affected.”
Few applications showed innovation in this area. Those that did stood out, especially those that took action prior to submitting their application:
EdenTree applied with a potential new product. They “partnered with Green Schools Project to … [engage] directly with 70 students aged 11-17, asking where in society they would like to see more investment. Their insights have shaped our investment priorities – they emphasised climate resilience, healthcare and opportunities to empower the next generation.”
Isio created a “…representative panel of 18–25-year-olds from across the firm [to ensure that] the voices of the next generation are heard and embedded in our approach… Through their insights, [the panel] played a pivotal role in shaping our proposed investment strategy.” The panel will be retained after the process as an employee network.
Gresham House planned to set up a “Mission Board, comprising 3-4 individuals to ensure alignment with EIC principles – including one rotating annual seat for a FGP [member]”. They also planned to set up a “Future Generations Advisory Committee, made up of up to five members of the FGP… [which would] meet with the investment team at least annually.”
Tribe Impact Capital offered “An invitation to the Future Generations Panel to join our internal Investment Committee giving young people agency and a voice, while also nurturing the future generation of decision makers in finance.” At the EIC event they confirmed they would offer a position like this even if they did not win, after being questioned on this by the FGP.
Conduit Connect proposed to work with the Centre for Innovation in Voluntary Action (CIVA) on a youth engagement initiative to complement the fund. Part of this involved plans to “deliver an annual Youth AGM for the Fund, which will invite the Future Generations Panel and up to 100 young individuals to learn about the portfolio of investments, engage and share their views, and provide feedback on the areas of our thesis that really matter to them and excite them.”
These examples show that ISPs can explore what genuine participation might look like and open up processes that have historically been closed and opaque. This work requires time, resource, and a willingness to cede some control over outcomes. But ultimately shouldn’t the people most affected by those decisions have a voice in shaping them?
The question for both charity investors and ISPs is whether participation becomes embedded in how we make investment decisions or remains an occasional experiment.
Room for improvement on transparency
Another central principle of the EIC was transparency and bringing investment decisions into the open. Overall, applications were fairly transparent, but there was room for improvement.
For example, the RFP asked ISPs to provide at least three investments that the ISP is:
- “…most proud of in terms of impact and the very best in your portfolio.” (stars)
- “…least proud of in terms of impact, why you are least proud of them, and why they need to be in the portfolio.” (dogs)
This question illuminated concretely where partners’ capital would ultimately go, whilst also demonstrating critical thinking and honest reflection from the ISPs.
Across all applications, 164 stars were mentioned compared to 113 dogs.
WHEB stood out because they referred directly to their pre-existing impact calculator to respond – sharing the highest and lowest scoring investees. The deep thinking and analysis had already been done. This was in-keeping with their generally very high level of transparency, for example publishing summary minutes from their Investment Advisory Committee on their website.
Wellington Management also answered this question comprehensively with a transparent internal scoring system. This was consistent with Wellington’s impressive approach to impact measurement and management.
Castlefield engaged deeply and transparently with the question of why less impactful investments need to be in the fund. They also appeared to have transparent practices throughout the organisation.
From the shortlist, WHEB and Triodos Investment Management publish a full list of the holdings in their relevant funds accessibly on their websites. This is not easily replicable for all applicants. For instance, some asset classes or types of ISPs aren’t able to provide this level of transparency for confidentiality reasons. However, for those that can, this shows impressive transparency.
Disclosing the information above is hard during a competitive tendering process, with limitations on word count for RFP responses. But given a part of the sustainable investing backlash was a reaction to perception of greenwashing and over-claiming in the industry, there is clearly more ISPs can do to present a realistic picture of the impact their investments contribute to.