Stockholm (NordSIP) – This week, global asset manager T. Rowe Price, responsible for overseeing US$1.6 trillion in assets, launched the Global Impact Equity Fund, designed to deliver a positive and measurable impact on the environment and society, alongside the prospect of alpha generation. This is the first vehicle for T. Rowe Price Funds SICAV London that is aligned with Article 9 of the EU’s Sustainable Finance Disclosures Regulation (SFDR).
The strategy typically holds between 55 and 85 stocks from across the market capitalisation spectrum and is benchmarked against the MSCI All Country World Index Net. The SFDR Dark Green fund is managed by Hari Balkrishna and aims to deliver performance through active investment decisions based on impact-oriented corporate engagement, active proxy voting, and building direct influence with management teams.
“The investment industry has reached an exciting point where we can contribute to positive societal and environmental change, alongside a focus on financial performance. Being able to marry these goals together in a single strategy is an exciting step forward for us as investors, and we look forward to partnering with clients in our pursuit of positive impact at scale, on a truly global basis,” Balkrishna comments.
Balkrishna has 15 years of investment industry experience, having spent the last decade at T. Rowe Price. From 2015 to the end of 2020, he was associate portfolio manager of the group’s Global Growth Equity strategy. Further information about the fund. Most recently, he contributed important insights about T. Rowe Price’s approach to impact investment to NordSIP’s 2021 Impact Investing Handbook.
The new fund targets sustainable investments aligned with climate and resource impact, social equity and quality of life, and sustainable innovation and productivity. The fund will be aligned with the United Nations Sustainable Development Goals (UNSDGs), a globally recognized framework designed to end poverty, ensure prosperity, and protect the planet
In terms of impact evaluation, the fund focuses on four key impact pillars: Materiality, Measurability, Additionally and Resilience. Addressing materiality, every portfolio company is expected to deliver positive environmental or societal impact through its operations. To quantify materiality, companies should align corporate revenue and earnings with the impact pillars. Measurability is guaranteed by the impact assessment conducted at the start of each investment, which includes a specific impact thesis, defines key performance indicators (KPIs) and highlights negative externalities and risks. T. Rowe Price argues that additionality is achieved by being an active and engaged shareholder, with significant corporate scale, which enhances impact. Resilience is created by demanding that each company’s solutions must be based on durable principles and apply forward-looking insights, especially in an era of disruption and extreme outcomes.
“ESG considerations continue to gain traction within the investment world especially in the Nordics – driven by societal, governmental, regulatory, and fiduciary demands. At T. Rowe Price, we have been building our responsible investing capability for several years, with ESG considerations now fully embedded within our investment processes. We are extremely pleased to unveil our Global Impact Equity fund, which is a natural extension of our continually evolving ESG efforts. This launch is also our first SFDR Art. 9 (Dark Green) offering, which joins our existing suite of Article 8 solutions,” says Henrik Fahlåker, Head of Nordics at T. Rowe Price.
As with other T. Rowe Price strategies, the fund will draw upon the firm’s global equity research platform, comprising 203 equity research analysts, 10 sector portfolio managers, and 73 regional and diversified portfolio managers. In addition, the fund will tap the deep expertise of the firm’s Environmental, Social and Governance (ESG) experts and responsible investing research analysts as well as its proprietary Responsible Investing Indicator Model (RIIM), a database detailing how more than 15,000 securities measure up against established environmental and social parameters.