Do you want to invest in social progress? Here’s how.
Catch up with Anne Tolmunen, Portfolio Manager, AXA IM Equities
What does ‘investing in social progress’ mean?
Investing in social progress means seeking to identify the areas of society which provide the most fundamental social needs and actively investing to improve the equality of access globally. In this insight, we refer to the United Nations (UN) Sustainable Development Goals (SDGs), more than half of which have a social dimension.1
We identify and invest in companies that contribute to these SDG targets. In our strategy there are 3 main sub themes:
- Social and economic inclusion
- Protection of people, access to health care, physical protection and prevention.
- Social elevation.
In practical terms, what kind of companies are we talking about?
The investment opportunities here are very diverse. Investments are made in all regions and in many industries. For example, Capitec Bank is a bank in South Africa's emerging markets which offers its services at a lower cost than the country's banks, increasing access to basic financial services. It has also invested heavily in digital technology as its bank accounts are increasingly accessed via a mobile phone.
Within Europe, the company Eurofins Scientific has a network of analytical laboratories and works on the prevention and detection of infections.2
Can we seek performance from investing in social progress?
Yes. We believe that we are at an inflection point where there are certain structural trends which can generate extra financial value, in addition to financial performance over the long term. These aims are not incompatible. Real investment opportunities can be found from the growing democratisation of technology, a trend from which new business models are emerging. There are many innovations in the medical and healthcare space. Within emerging markets, the middle class is expanding and becoming increasingly capable to spend more on their needs.
Why does AXA IM believe in investing in social progress?
At AXA IM, we believe in the importance of equality of access to key societal needs and have been investing in the social sector for 30 years. As a responsible investor, we seek opportunities which drive social progress within our global community. We have reached the point where there are real and increasing opportunities and business models that will create financial and extra financial value over the long term. That is why we have invested in more resources and analysts to develop our social impact management skills within our comprehensive suite of responsible investment capabilities.
Who can invest in social progress?
Social progress is available to investors large and small, and anyone who is prepared to invest for the long term and cares about their social footprint. This is the case with more and more clients, with particular concern about social inequality growing amongst the younger generations.
What is the key takeaway point about investing in social progress?
Positive impact management is on the rise, so now is the time to consider adding impact investments to portfolios. We hope the social aspect will follow the path of the environmental aspect and attract more enthusiasm for this very important subject. Due to the effects of COVID-19, the issues caused by social inequality has moved to the top of the priorities of governments, businesses, and also citizens.
- Full details about the SDGs are available on the UN website: The Sustainable Development Agenda - United Nations Sustainable Development
- References to companies are for illustrative purposes only and should not be viewed as investment recommendations.