47: Tim Crockford of Regnan Equity Impact Solutions: The Future Belongs To Everyone

Tim Crockford leads the Regnan Equity Impact Solutions team. He previously managed the Hermes Impact Opportunities Equity Fund from its launch in December 2017, having co-founded the Hermes Impact team in 2016. Tim joined Hermes Investment Management in 2009 as a research analyst for the European Equities team and became lead portfolio manager of the ESG-integrated Hermes Europe ex-UK Equity Fund in 2015, which he also managed until he left Hermes.

About Regnan
Regnan is a responsible investment leader with a long and proud heritage providing advice and insights on important environmental, social and governance (ESG) issues. Regnan was established in 1996 to investigate and address ESG-related related sources of risk and value for long-term shareholders in Australian companies. Building on that expertise, in 2020 Regnan expanded its capabilities into responsible investment funds management, backed by the considerable resources of Pendal Group (ASX:PDL), the Australian investment manager and owner of J O Hambro Capital Management. They have offices in Sydney, Melbourne and London.

Key Points:

• Engagement and stewardship is a hugely important part of impact investing.
• “It’s all part of the same strategy to really try and democratise it as an investment category, to broaden access to impact investing.”
• “I think one of the cultures within the investment team is this concept of constant improvement, so the strategy, the process, the philosophy is identical to the one that we founded back in 2012, we started building in 2016, and launched in 2017.”
• On systems change - Our SDG taxonomy is the centerpiece. The taxonomy is basically what helps us identify what systems we’re going to be moving towards. It is a process and a list of economic activity in product and services that are being produced by companies that help achieve specific SDG targets.
• “I hope to see that all Article 9 business takes much more nuanced and thoughtful approach to classifying which companies they will ultimately invest and allocate their capital towards, and which they aren't ...
• ... I think ultimately, businesses change and businesses can reinvent themselves, which is something that that needs to be reminded. We have some great examples in our portfolio of companies that have transitioned from perhaps in the industries that have been extractive industries and negative industries in the past towards, you know, positive areas like renewables in renewable energies, but ultimately, it's much more complicated and much more qualitative than a simple scoring system can ever help you achieve.”
• Education is key. Being able to help investors that are new to sustainable impact investing to understand and decipher this alphabet soup of terminology is key, because it allows them to quickly or more quickly align, their own objectives with the products that are available to them on the market. 
• Further education and refinement of the terminology is key. 
• Fund managers that are perhaps newer to the game, should try and be vigilant and careful with how they label their products, not just from a regulatory point of view, but also from a naming convention point of view. Because it makes a big difference in helping the broader understanding of people who are just learning about this space as we speak.
• The future belongs to everyone
• Good businesses exist to solve problems.
• Look beyond the marketing material and imaging to really challenge the investors to tell you what they want to achieve and tell you how they want to achieve it.
• Leaders are innovative and sometimes have to rewrite the rules.

Time Stamp:

[0:00:50] Intro

[0:02:30] What is sustainable and impact investing?

[0:06:44] It takes time. Its not an absolute good or bad.

[0:11:20] Saving the world or financing the people changing the world 

[0:12:46] Regnan, JO Hambro Capital Management and Pendal Group

[0:19:17] Separation of brands is driven my communication

[0:23:06] Being the best not the biggest

[0:27:12] Bringing culture together, herding (TOP) cats

[0:30:20] Leaving Hermes, joining the  team, building the culture of improvement

[0:35:10] Launching of funds and having access to research team

[0:37:40] The Checklist Manifesto, looking at negative impacts

[0:40:00] Break even goals from the Future Fit Foundation

[0:44:40] Impact assessment and SDG taxonomy

[0:50:05] Impact measurement and KPIs 

[0:55:00] Investment examples: YDUQS, importance of community, AFYA

[1:02:30] SDG, SFDR, Forbes article

[1:07:05] Article 9 and EU Taxonomy

[1:12:40] Output driven process to assess

[1:16:16] Importance of educating new sustainable impact investors

[1:19:22] Product innovation in financial services

[1:21:08] What made Tim go into impact?

[1:24:25] What makes an impact leader? Call-to-action

Useful links:

Tim Crockford https://www.linkedin.com/in/tim-crockford-8aab9b30/

Regnan https://regnan.com/
Regnan Q1 2021 Impact Report 

JO Hambro Capital Management https://www.johcm.com/

Regnan JO Hambro https://www.regnan-johcm.com/

Pendal Group https://www.pendalgroup.com/

The Checklist Manifesto http://atulgawande.com/book/the-checklist-manifesto/

Impact Leaders Episode with Martin Rich of Future Fit Foundation 

Future Fit Foundation https://futurefitbusiness.org/

Future Fir Business Benchmark  

YDUQS https://www.yduqs.com.br/

AFYA https://afya.com.br/

Mirova https://www.mirova.com/en

ESG vs IMPACT =  Top 5 highest ESG rated FTSE companies according to Hargreaves Landsown
SFDR - Article 9 - Forbes article by JP Dallmann
FT article; HSBC avoids revolt by investors pressing for cut in fossil fuel loans

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