Impact investments target measurable social and environmental benefits, alongside financial returns. But the term can be confusing, since it typically refers to one of two very different approaches.
At Prentiss Smith & Company, we have spent 40 years prioritizing environmental and social impact in all investments we make for clients. We consider both positive and negative impacts, in tandem with financial factors. Our approach is supported by in-house research, activist proxy voting, and ongoing corporate engagement. We also avoid funds, for a more direct view into each investment’s impact. While we believe our approach is unique, it fits one widely accepted definition of impact investing.
The other definition, used predominantly by investment professionals, refers to large capital or debt investments in start-up companies or untested projects. While such investments can certainly be worthy, they tend to carry greater risk than investments in established institutions. Such impact investments may also require very high thresholds of available assets, experience, and risk tolerance.
At Prentiss Smith & Company, we believe it’s possible to deliver impactful investments while at the same time managing risk and targeting strong financial returns. If that sounds like a fit, let’s talk.
We focus on company policies that progress the fight against climate change, promote a circular economy, or drive water and forest preservation. We rule out investments in the production, marketing, or distribution of fossil fuels, or in mining or agrochemicals.
We seek out companies with equitable labor practices, diverse workforces and transparent supply chains. We do not consider investments in defense or weapons, retail gun sales, private prisons, tobacco, gambling, or pornography.
We believe corporate policies and goals should demonstrate prioritization of all stakeholders, including employees, customers, shareholders and communities. We exclude companies we feel have broken trust with these stakeholders, and seek those that give back to communities.
To have a positive social or environmental impact, we believe an investment requires rigorous, internal research, pointed proxy voting, and direct communication with the institutions our clients invest in, to to help drive even more progress on key issues.
We fully integrate our investment research, so that financial, environmental and social factors are all considered throughout an investment decision.
We divest from many industries, including fossil fuels, defense and weapons, and private prisons. But we take this approach a step further by additionally excluding companies that primarily service or benefit from these and other, destructive industries.
We believe investments have more impact when we prioritize client values when voting proxies, rather than rubber-stamping corporate recommendations. Our policy includes support for board diversity, more equitable executive pay, better corporate disclosures, and shareholder resolutions pushing environmental and social progress.
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