La Financière de l’Echiquier (LFDE) has released an innovative and continuously evolving Impact Doctrine for its two impact funds, Echiquier Positive Impact Europe, one of Europe’s first SDG-based investment solutions and launched in 2017, and Echiquier Climate Impact Europe2, which was launched in 2020 and is dedicated to the energy and environmental transition.
The Impact Doctrine is intended to provide a framework for LFDE’s impact investment strategies. It also reflects LFDE’s new approach to listed impact investing, characterised in particular by a drive for transparency with investors, as specifically noted in Echiquier Positive Impact Europe’s third annual impact report. The report was produced in collaboration with Better Way’s independent experts and concretely measures the positive impact of investments in portfolio companies against the United Nations Sustainable Development Goals (SDGs). The Impact Doctrine is inspired by the initial work of the French “Forum for Sustainable Investment” (Forum pour l’Investissement Responsable, FIR), France Invest and the Global Impact Investing Network (GIIN).
The impact doctrine is based on three pillars:
• Intentionality: the express intention to generate a positive environmental and/or social impact is the starting point of any impact investment approach. Intentionality is determined on the basis of an impact thesis, the setting of ex-ante impact goals combined with precise indicators, robust governance, dedicated internal resources, and other sources.
• Additionality: this is a special and direct contribution from the investor allowing the invested company or financed project to enhance the net positive impact of its activities. At LFDE, this means long-term equity holdings in the invested company, ongoing dialogue with management, and other factors.
• Measurability of the impact of investments and of funds is crucial for enhancing transparency on the actual impact of clients’ investments, as well as for tracking progress in pre-established impact objectives. These measurements are conducted with the backing of independent experts and are built into the compensation structure of impact fund managers.
Bettina Ducat, Chief Executive Officer of LFDE, says: “We are confident that impact investing on listed markets is decisive for financing the world of tomorrow. As a responsible investor for the past 30 years and a pioneer in impact investment in France, La Financière de l’Echiquier plans to actively contribute to building up impact finance on the public markets. This impact doctrine is meant to establish a framework for our strategies, as well as to unceasingly strengthen our impact commitment and standards.”
Coline Pavot, Head of Responsible Investment Research at LFDE, adds: “To us, impact investment goes without saying. This impact doctrine is the culmination of several years of work. It is an opportunity to shed light on the uniqueness of our practices and, hence, to explicitly state the promise made to our clients on impact investment and forestall any “impact washing”. Additionality plays a decisive role in managing any impact fund. This is the extra effort to go beyond being a responsible investor and to become an impact investor.”
