Ben Constable Maxwell of M&G Investments: Redesigning Capitalism With Purpose

Episode 42,   Oct 15, 2020, 11:00 AM

Ben Constable-Maxwell is Head of Sustainable and Impact Investing at M&G Investments, leading the strategy on impact investing as well as covering sustainability issues such as climate change and the circular economy. 
He has been central to the development of ESG integration within M&G’s investment processes and has supported the development of ESG solutions for clients across asset classes. 
Ben plays an active industry role as a member of various sustainable and impact investment initiatives, interacting with companies, policymakers, NGOs and other investors. He is a Trustee at Firefly International youth organisation, which provides educational and mental health support for young people in conflict-affected areas in the Balkans and Middle East. 
Previous to joining M&G in 2003, Ben spent four years with the Equities team at Invesco Perpetual. 
He has an honours degree in Classics from the University of Newcastle-upon-Tyne.

Highlights: 
  • “We have a responsibility to integrate ESG across our suite of investments and asset classes”
  • If you think about the the issues that drive performance, the issues that really can cause major blow ups, often they're ESG related.
  • Data breach, oil spills, falling faul to a major diversity and inclusion related scandal are all things that can hit the reputation and bottom line of consumers. We just think you have to take into account all these risk whether ESG funds or not, right across all $350B assets.
  • “We have a suite of ESG funds that covers different asset classes. Over the last 10 years, in particular the past 4-5 years, the ESG integration programs across M&G started in equities and fixed income, but is now broadening out to all asset classes on behalf of clients. All of them now say they embrace and integrate and ESG approach.”
  • We have to and our clients wants specifically designed funds with clearly articulated ESG integration programmes 
  • Impact financing fund - Private debt investments in liquid debts investments that have a net positive impact such as social housing, energy efficiency and green buildings, renewable energy infrastructures
  • ESG needs to be managed and communicated just as how the risk function has evolved over the past 10-15 years. There is expectation from clients that ESG is an important part of the process.
  • It’s not just the ESG team, it has to come from the leadership.
  • Companies are not just seeing this as a leadership issue, they are seeing this as a survival issue.
  • Shifting from competitive, moated competitive advantage thinking to a open-minded, supportive, collaborative approach.
  • Mindset shift in healthcare sector with Covid - the role is not just to protect your IP and generate super normal returns but to provide healthcare and save lives.
  • M&G Triple “I” framework: Investment, Intentionality, Impact.
  • Investment: sustainable business models, good company, long-term.
  • Intention comes from purpose, clarity of purpose and authenticity.
  • Examples of KPIs - Millions of tons of greenhouse gas saved, avoidance of virgin material and use of virgin forest. Millions of trees saved, millions of people accessing financial services in underserved communities.
  • Move from a shareholder primacy perspective to a stakeholder responsibility perspective.
  • A company should genuinely be thinking about its responsibilities to all stakeholders and future generations.
  • Impact adjusted accounting approach - we need a new accounting system for the 21st century.
  • Collaboration is at an all time high, to navigate the complexity of changes and behaviours we need. 

Time Stamp:
[03:00] What is sustainable and impact investing?
[05:00] What does M&G do?
[10:00] ESG issues and integration programs
[12:00] Positive impact fund
[15:00] ESG as an ongoing process
[20:00] Evolution of risk functions and ESG
[22:00] Internal asset owner and leadership expectation 
[26:00] Oil and gas, BP, Climate Action 100
[28:00] Measuring impact and “Triple I” framework
[35:00] Competitive markets, collaborations and partnerships
[38:10] Redesign capitalism
[41:00] Stakeholder capitalism, behavioural change and leaders
[42:00] The purpose of a company
[46:23] Are we at an inflection point? Authentic and ethical?
[48:00] Call-to-action

Useful link:
Climate Action 100 Plus - http://www.climateaction100.org/
The Impact Management Project - website
GIIN https://thegiin.org/
GIIN IRIS+ framework - video 
The Investment Association - website
The Global Reporting Initiative + The Global Reporting Standards - website
SASB
George Sarafeim, Harvard Business School, Impact Weighted Accounts
UN Principle for Responsible Investment - PRI
Big Four ESG reporting framework standards. Deloitte + Ernst & Young  + KPMG + PwC

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Connect with JP Dallmann on Linkedin, Twitter, or Instagram.
Contact us to help you transition into Sustainable & Impact Investing - ILA & Partners
How to incorporate SDGs into your business model - Fast Forward 2030
Impact Leaders is produced by Podcast Publishing

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