The pressing challenges of natural resource scarcity and broad climate change – combined with global population growth, an expanding middle class, rapid urbanization and strengthening environmental and social policies – are driving a transition towards investment solutions for sustainable economic development.
Our strategies reflect the conviction that investing to generate financial returns and lasting social and environmental impact are not only compatible, but also mutually reinforcing objectives.
Sonen’s multi-manager investment approach aims to achieve appropriate portfolio diversification by providing access to high-quality impact strategies. The benefits of our integrated investment and impact expertise include:
At Sonen Capital, we define Impact investing as the full range of investment opportunities which address an investor’s desire to realize financial return while achieving meaningful and measurable positive social and/or environmental impact.
This illustration provides some distinction among various approaches to impact investing and helps investors understand how these approaches differ in investment selection and impact creation. Generally, as investors move from left to right along this spectrum, they can expect higher degrees of impact creation.
Sonen’s guiding principle is first defining what impact we wish to achieve – through any single investment, or through a portfolio of investments. Without defining the intended impact, or the outcomes that we seek, it is impossible to measure and report the extent of our success.
Our outcomes-based investment process is based closely on a Theory of Change or a Logic Model – a simple tool that explains how we do our work. We first define the impact we seek, or the outcomes we wish to see manifest as a result of our investments. These outcomes are often specific to investment themes, such as climate change, racial equity, or water conservation. After defining our intended outcomes, we then identify the ways in which we will measure our progress, namely through the outputs of regular business activities among the companies in which we invest. Defining such outputs helps identify suitable investments – funds or actual businesses – that can deliver those outputs through their day-to-day business activities.
As we complete the Theory of Change, we consider what kinds of inputs will be necessary to deliver these results. Inputs in this context include the types of capital we deploy: public or private equity, public or private debt, concessionary return capital (such as a program related investment) and even guarantees.
We employ our outcomes-based approach for our internal investment strategies, as well as on behalf of clients who are seeking specific impact results for their investments. Sonen has authored and published several examples of how our intended outcomes guide our investment process.
Sonen has authored and published “impact frameworks” that describe our specific approach to investing across specific issue areas, or ‘impact themes,’ such as energy, water or sustainable agriculture. For each of these impact themes, Sonen employs an outcomes-based approach to identify the desired impact creation from any particular investment or portfolio of investments. Specific impact investment strategies that help manifest our intended outcomes are identified across public and private markets. Sonen has published impact frameworks on the following themes:
Financing centralized and distributed energy infrastructure in regions where availability varies or power sources are “dirty”.
Technologies across industries that increase energy efficiency; consumer-level technology that reduces energy consumption.
Target key agriculture themes that improve global food security, meet global nutritional needs and improve environmental sustainability, including:
Financing for organic or sustainably-oriented food production; and preservation of the use of agricultural land.
Technologies for precision agriculture and increased water-efficiency.
Infrastructure for efficient production, storage and distribution of food resources; preservation of use of agricultural land.
Bonds for energy efficiency retrofits.
Technologies or innovations that reduce demand for raw materials and energy consumption within buildings.
Sustainably-built workforce housing in global geographies where demand greatly exceeds supply.