Hello and a very warm welcome to our Impact series, Impact Investing Under the Microscope. Now we're here in the magnificent setting of Kew Gardens here in London, and Kew Gardens hosts the largest and most diverse botanical collection in the world. What better setting is there to film our Impact series? Now, today's episode is called Impact Investing 101, and I'm happy to have two very knowledgeable and very passionate impact investors here with me today. John William Olson, fund manager of the Positive Impact Fund, and Ben Constable-Maxwell, head of Impact investing at M&G. -Welcome to Kew Gardens. -Thank you, Susanne. Now, maybe let's start with the first question to both of you. What is impact investing and why is it so important? Yeah, maybe I can I can kick off. Impact investing in listed equities, which is what Ben and I do on the positive impact strategy is about finding and selecting companies with a measurable, positive impact on society. So companies with solutions for some of the major societal issues, that's obviously a lot of detail that goes into that and a lot of work that goes into it. But I'm sure that that Ben will touch -on on that later. -Yeah. No, from my perspective, it's very much about the role that investors can play in directing capital, directing investment towards the solutions to those challenges. And I think in particular it's about working to support or address those issues that traditional finance is not dealing with. So it's about investing in issues that are under addressed or and dealing with communities and groups that are vulnerable or underserved. So to really try and tackle those issues in a way that is not being not not being dealt with -already. -Ben, maybe in the next question to you, how is impact investing then addressing these big societal challenges the world is facing today? The issues range from environmental, social and economic issues and cover everything from climate change, you know, biodiversity loss, pollution and through to social issues like health and poverty and inequality. So the role of impact, investing in tackling those issues is really central. And I'd say, you know, one of the frameworks that's really useful for investors to think about and to to embrace is the UN Sustainable Development Goals, which really set out an action plan for tackling those issues. Now the SDG funding gap, which is an indication of how much more capital requires to be allocated, is in the region of 4 to $5 trillion a year. And really impact investing has got a massive role to play in helping direct that capital to those challenges and solving those problems that are represented by the SDGs or other other ways of thinking about it. Thanks, Ben. Maybe another question straight away to you. Impact investing, you said started in private assets. Now today we are talking about impact investing in public equities. So could you tell us a bit about which attributes were taken from private impact investing to the listed equity side and how they are used -today in public markets? -Sure. Well, I think impact investing is a sort of industry wide and society wide responsibility and opportunity and it can now be implemented across asset classes and along the spectrum of capital. But as you say, it originated and emerged in the private market sphere. The term impact investing was coined in 2007, building on lots of fascinating and important work done in the in the decades before that. But it while it's come from private markets, it's really blossomed into a massive opportunity, we think, for public market investors, which is our approach on the fund as John William mentioned. And I think the role of us as in public markets, is to really embrace and adopt those principles. And really the principles are issues like intentionality, being really intentional and purposeful with your investment strategy, thinking about the importance of evidence and measurability, you can't really claim to have impact unless you can show the impact being generated. And then I'd say the kind of really core concept of of additionality, which is a bit of a clunky word, but it's about what issues can impact  other stakeholders and actors. What can impact investors do to really tackle those under addressed? Issues for underserved groups and people to drive positive change. So it's about embracing those principles and applying them in a slightly different way in public markets to to history and private markets. Thanks, Ben. Interesting. Maybe another last question to you. What is the theory of change and how is it used by impact -investors? -Sure. Well, the theory of change is a really important and central framework and concept within impact investing. And really, it's quite simple. It aims to identify the problem and help investors identify the challenge they're looking to address. But to work out and set out a really logical flow of actions and steps that investors can take when looking to tackle that challenge. So, for example, if you're trying to deal with a problem or the challenge of climate change, the theory of change articulates how you as an investor can set your goals, set your objectives, make your investments, work with your company that you're investing in, so that you're achieving that positive impact over the period of your investment. John William, We heard a lot about impact. I would like to move a bit to the investment side now. As an impact investor, you're obviously looking for companies that are impactful, but also you're looking for companies that are interesting and attractive from an investment point of view. Can you talk a bit how you tackle these two aspects simultaneously? And also, can you please give us a bit of a better understanding why impact investing is so interesting for long term -investors? -Sure. On your on your first point, you're absolutely right. We have we have a dual objective on our funds. One is to deliver a good and hopefully superior financial return on on the on our investments, but also to deliver that positive impact by the companies that we're investing in. So we try to find a balance of of of those two things. When we when we set out launching the strategy almost five years ago now, and we did that by incorporating it all into the same framework, we call it the triple I framework, and it's based on investment, intention and impact. And we want the companies to do well  on all counts. Investment is basically the business model we invest with the view of of holding those stakes in companies for the next ten years. So we want those companies to be in a position where they can use their business model to create a better financial return over that period of time and then create a positive impact on the back of that. We invest the money back into the business and create even more impact going forward. We call it the double compounding you compound on your financial returns and you compound on your  your impact. -Thanks, John William, I would like to ask you another question. Obviously, as an impact investor, it's quite specific what you're looking for. So it's a quite specific subset to the global investment universe. Can you talk a bit about the breadth of the impact investment universe and also when you're building the portfolio, what are the portfolio construction aspects you consider? -Sure. -We are focused on finding those companies with very specific solutions and it must be a material part of what they do as well. So it's not enough that it's just a small part of that business. And for that reason we do end up quite far removed from from the benchmark. That doesn't mean that we don't that we don't have a lot of stocks or companies to select from because we can find companies in within social inclusion, for example, financial inclusion and emerging markets could be environmental companies within the software space, industrial space, utilities across the globe. And in health care. The health care space is very broad and diverse in terms of end markets. So anything from laboratories to to highly innovative, newer companies trying to develop the next new thing or companies with a big current footprint where they help a lot of people and they help improve the lives of of of a big, big population of underserved people if if we can find those. So we have a lot we have a lot of choice. So we can create a properly diversified portfolio. But you need to think as a as a fund manager, you need to think about diversification in a slightly different way and start out with the fundamental diversification. And our investment horizon is around ten years. So when we start out at our starting point, when we pick a stock or a company, we say we're going to stick with this for at least a decade. And it changes the way you think about not just the stock picking and the selection of the company, but also how you create the diversification on your fund. So if you get that fundamental diversification right, we believe that's what matters most over the next decade. Thanks, guys. That sounds really exciting and thanks so much. I think there was an excellent introduction to our Impact Investment series. Now, if you're interested in impact investing and would like to find out a bit more, we have a second and a third episode coming up. In the second episode we'll be talking about genomics and social inclusion. And in the third episode we'll be talking about green hydrogen. So stay tuned.