At Inspirit, we recognize that impact investing is an important tool for positive impact. By investing in companies whose values align with our mission, we can create much-needed systemic change. That’s why we committed to transitioning our assets to a 100% impact portfolio.
Through this commitment, we can use our assets to generate financial returns as well as positive social and environmental impact.
We formalized this commitment in our Investment Policy Statement, to guide us in our investment decisions. The Statement outlines three main investment goals:
How do we Calculate our Performance?
Inspirit compares our portfolio’s performance relative to an industry-standard benchmark. Our benchmark is a combination of industry-standard indexes, like FTSE TMX Universe Bond for the fixed income allocation of our portfolio, S&P/TSX Composite for Canadian equities, and MSCI ACWI (CAD) for global equities. The overall benchmark is a composite of the above, weighted by portfolio allocation.
By the end of 2020, Inspirit expects to meet our goal of a 100% impact portfolio.
Here’s a look at our performance compared to our benchmark to date.
This is measured by the net returns of our portfolio compared to net returns of our benchmark.
Compared to our benchmark, here is what a hypothetical $10,000 investment in the Inspirit portfolio from 2016 to 2019 would look like.
Carbon Footprint Performance
This is measured by the weighted average carbon intensity of our portfolio compared to our benchmark. Weighted average carbon intensity measures the tons of carbon emitted by our portfolio companies relative to their sales. The lower, the better.
Positive Social and Environmental Impact Performance
This is measured by both the environment/social/governance (ESG) scores of our portfolio, as well as how our investments contribute to the United Nations Sustainable Development Goals (SDGs). We compare both these metrics against our benchmark.
We use ESG scores to assess the operations of a company (i.e. fairness of the supply chain, composition of leadership etc.). These scores help us understand the internal operations of our portfolio companies and whether their values align with ours. ESG performance is calculated on a 10-point scale.
We also measure positive impact through the percentage of our portfolio that earns a majority of its revenue from products and services that contribute to the United Nations’ SDGs.
Analyzing how a company earns its revenue helps us understand what the company does and whether it aligns with Inspirit’s mission.
Below is the percentage of our portfolio that earns a majority of its revenue from contributing to SDGs, compared to the benchmark.