Managed by Dutch asset manager Triodos Investment Management, Triodos Pioneer Impact Fund aims to generate positive environmental and social impact, coupled with healthy financial returns while investing in small- and mid-cap companies who work towards a more sustainable and inclusive society.
In 2020, despite the uncertainty of the coronavirus pandemic the assets under management of the fund grew by 37%, according to Thibaud Bastien, product marketer at Triodos IM.
"The fund largely outperformed the market, with a 2020 return of 22% net of fees and transaction costs," Bastien said.
The fund follows a three-step investment process:
- Companies must show they contribute to at least one of Triodos' seven transition themes: Sustainable Food and Agriculture; Sustainable Mobility and Infrastructure; Renewable Resources; Circular Economy; Prosperous and Healthy People; Innovation for Sustainability; and Social Inclusion and Empowerment
- Companies must prove their business does not harm the environment or society, which is confirmed through a thorough in-house minimum standards assessment
- Triodos IM assesses the effect of material sustainability factors on company value drivers.
Active ownership is an integral part of Triodos IM's entire process, according to Bastien, with the investment team actively engaging with companies before investing, to assess their true sustainability profile. This is especially relevant for this fund, as it invests in smaller and less researched companies, he said.
Bastien added: "We believe that in the long run, the most successful companies will be those that progress sustainable solutions to today's pressing environmental, economic, and social challenges. We finance change and change finance."
Dirk Hoozemans, the fund manager, commented: "This award is a great recognition and strengthens our commitment to invest in the winners of tomorrow: small and mid-sized companies that are key in building an economy that is fit for the future. These companies are making waves where it counts."