Latest / Financial Planner Life Podcast / Jeremy Korn - on Impact & ESG Investing, why ethical investments are important & the changes to MiFID II for Financial Planners

Transcript

Jeremy Korn - on Impact & ESG Investing, why ethical investments are important & the changes to MiFID II for Financial Planners · Financial Planner Life Podcast

• 0:02
  SPEAKER_00: Hi, and welcome to the Financial Planner Life podcast, where we talk to professionals at varying stages in their career about what it's like working in the wonderful world of financial planning and financial advisors.
• 0:15
  SPEAKER_00: This podcast is proudly sponsored by Recruit UK, a recruitment consultancy specifically focused on the financial services.
• 0:23
  SPEAKER_00: They have a new specialism, recruiting, within the financial planning industry.
• 0:27
  SPEAKER_00: So check out their website for the latest job opportunities, hits and tips, and blog articles.
• 0:34
  SPEAKER_00: Today's guest is Jeremy Korn, who is the CEO of Impact and Investor, which is an ethical and impact investment platform set up for financial planners and sophisticated investors.
• 0:48
  SPEAKER_00: And Jeremy has an extensive background working within financial services and financial planning.
• 0:54
  SPEAKER_00: So we learned loads around his pattern, which is ethical investment, why he got into that side of the industry, and the benefits to financial planners using the platform.
• 1:04
  SPEAKER_00: So I hope you enjoy it.
• 1:06
  SPEAKER_00: Hi, Jeremy.
• 1:06
  SPEAKER_00: Thanks so much for joining me today on the Financial Planner Live podcast.
• 1:11
  SPEAKER_00: How are you today?
• 1:13
  SPEAKER_01: I'm very well, thank you, Sam.
• 1:14
  SPEAKER_01: And uh thank you indeed for inviting me today.
• 1:16
  SPEAKER_00: Yeah, no problem at all.
• 1:17
  SPEAKER_00: So um, Jeremy Korn, I've I've I've dealt with you before in the past when you were working as a financial planner.
• 1:23
  SPEAKER_00: Um, you yourself at the moment um are now the CEO of Impact and Invest, which is an ethical investment platform for sophisticated investors and financial planners alike.
• 1:36
  SPEAKER_00: Um and today, really, what I want to do is sort of find out a little bit, a little bit brief about your history, um, how you got into financial services, what you've done, and then focus on um Impact and Invest and the benefits really to um those that use it.
• 1:51
  SPEAKER_00: Is that okay?
• 1:52
  SPEAKER_01: Yeah, that that sounds great.
• 1:53
  SPEAKER_01: Fabulous.
• 1:54
  SPEAKER_01: Okay.
• 1:55
  SPEAKER_00: So um, Jeremy, so um yeah, just are you okay to give us an overview uh of your background of financial services, how you got into it, what you've done up to this point?
• 2:05
  SPEAKER_01: Of course.
• 2:06
  SPEAKER_01: So um I got into financial services uh way back in 1989, uh when I was at university, and I saw an advert in the paper to do a bit of uh what they what they called prospecting, but it it was actually cold corning.
• 2:20
  SPEAKER_01: Uh, these were the days before before much regulation came in.
• 2:24
  SPEAKER_01: Um however, having said that, the the company I was working for at the time did conduct themselves in a reasonably uh organized manner.
• 2:32
  SPEAKER_01: Um but I started off in 1989 doing a bit of uh telesales as an assistant uh and went on a three-day training course and then came out as a fully fledged junior financial advisor.
• 2:44
  SPEAKER_01: That's how things were in 89.
• 2:46
  SPEAKER_01: Um, survived uh and adapted and grew as the as regulations came in, uh, moved away from being a TIDE agent working for an insurance company to becoming an independent financial advisor, uh, first of all with a national firm.
• 3:00
  SPEAKER_01: Uh, and then for many years I ran my own business.
• 3:04
  SPEAKER_01: So um I was um did a number of different roles.
• 3:08
  SPEAKER_01: Obviously, I was one of the directors of the company, I had a compliance function, a sales function.
• 3:13
  SPEAKER_01: Uh, we had three um three other advisors, um, a couple of uh power planners, uh, an administrator, um, and a local office, and and everything was going really, really well.
• 3:25
  SPEAKER_01: Um, 2008, 2009 came along, financial crisis uh really had a huge impact.
• 3:33
  SPEAKER_01: And um we the business transformed because we were doing a lot of investment business and we were doing mortgage business, and our mortgage business we were doing possibly as much as£15,000 a month of business prior to the um prior to the financial crisis, and then for the next 12 months, I don't suppose we did 5,000 pounds worth of business all year.
• 3:54
  SPEAKER_01: Um so it was it was a bit of a change in in circumstances.
• 3:58
  SPEAKER_01: So we um kind of adapted through that, and then in 2011, 2012, uh I had um I was starting to I've been in the industry then by that point for oh I don't know, too many years, 25 years or something, and I was starting to get a little bit bored.
• 4:17
  SPEAKER_01: Uh, and I've been doing the same thing for a long time.
• 4:19
  SPEAKER_01: The company had downsized the survivor financial crisis, and I had an offer to sell my client bank.
• 4:26
  SPEAKER_01: So I decided um at that time that that was the right move that I should make.
• 4:31
  SPEAKER_01: So I sold my my client bank, um, and it wasn't enough to retire on, but it's enough to um to have made some given me some leisure time to be able to decide what I want to do going forwards.
• 4:45
  SPEAKER_01: So after that, my my career got a bit more interesting.
• 4:49
  SPEAKER_01: Um stayed in financial services um and kind of went down two paths.
• 4:55
  SPEAKER_01: So the first path I got involved with was doing some fundraising with um for an insurance company, uh sorry, sorry, for a finance company uh who were raising money from high net worth and sophisticated investors.
• 5:07
  SPEAKER_01: And the guy there asked me to come in, he knew my background, and he said, listen, we've we've been doing this, but we don't think we're doing it correctly.
• 5:14
  SPEAKER_01: Uh, can you come in and and kind of sort things out a little bit, which which I did, which was my uh introduction to the world of alternative investments.
• 5:22
  SPEAKER_01: Now, alternative investments have had a terrible time because most of them have gone wrong and there's been a lot of fraud and scams.
• 5:29
  SPEAKER_01: But I can tell you that the one that I got involved with for this finance company never missed a payment to anybody, um, never never re-accepted uh somebody's money back at the end of the term directly.
• 5:40
  SPEAKER_01: They would always send it back to the investor, and if they wanted to reinvest, they would wait a few days, wait 28 days before accepting the money back.
• 5:47
  SPEAKER_01: Um very ethical, very I mean, the rest of the company was regulated, it's just the way it worked out, the investment side of it wasn't.
• 5:53
  SPEAKER_01: But I saw the good and the bad at that point of the alternative market.
• 5:58
  SPEAKER_01: Um, so I did that for a little while as a project till it finished, but I can say hand on heart that every investor that ever invested money on that uh has been paid every penny and on time.
• 6:08
  SPEAKER_00: I mean with um with alternative, sorry, Jeremy to interject that but with alternative investments.
• 6:13
  SPEAKER_00: So for a listener who um is hearing the word alternative investments, what is that?
• 6:20
  SPEAKER_00: What does it mean?
• 6:21
  SPEAKER_01: So an alternative investment is something that is is not standard.
• 6:25
  SPEAKER_01: So um a financial advisor, financial planner will recommend from a universe of funds, collective funds in various different formats.
• 6:34
  SPEAKER_01: If they have a very sophisticated investor, they may even recommend some um, if they have the right permissions and the right um and the right research tools, they might recommend even some direct holdings, possibly, you know, in in the bond stock of some of the PLC major PLCs, but that's rare.
• 6:51
  SPEAKER_01: In general, financial planners will recommend a collective fund.
• 6:56
  SPEAKER_01: Now, an alternative investment generally is in something that's not in the standard asset class and is quite often investing into the activities of one organization.
• 7:04
  SPEAKER_01: So it comes with considerably different risk profiles and considerably different regulatory um risks and ways of advising on such products.
• 7:16
  SPEAKER_01: Now, the majority of the alternative market in this country has not been uh, and the FCA have rightly clamped down on there's been fraud after fraud and um and badly designed investments.
• 7:27
  SPEAKER_01: But this particular company was an in was a finance company.
• 7:30
  SPEAKER_01: Their model was that they raised a small amount of money from investors, they had some of their own funds, and then they blended that with bank finance until they got to the tipping point where their loan book was sufficient that they needed they no longer needed investors' money and they could get entirely wholesale finance.
• 7:46
  SPEAKER_01: So um they raised um a few million pounds to help finance the company.
• 7:52
  SPEAKER_01: The company's now doing extremely well.
• 7:53
  SPEAKER_01: It's you know, everybody's there was nothing, but it's not that that's just something which is different to what a financial advisor would recommend, generally speaking.
• 8:02
  SPEAKER_01: One or two got involved who knew the company and knew the people behind it, but it's not a mainstream investment.
• 8:07
  SPEAKER_01: Um, but it was it was an interesting experience for me and developed um and gave me a little bit of understanding of how companies raise funding for themselves and how the regulation impacts on that.
• 8:22
  SPEAKER_01: Because a company that is, if you are raising money for another organization, that's regulated activity.
• 8:28
  SPEAKER_01: But as soon as a company wants to raise money for itself, whether it issues equity or debt and it's doing its own fundraising, that isn't regulated.
• 8:36
  SPEAKER_01: And the reason for that is that any otherwise, any time a limited company in this country wanted to raise any finance, it would have to apply for regulation, which would be crazy.
• 8:45
  SPEAKER_01: So a company can raise its own debt, that's not regulated activity, and therefore the investments, if they offer that to the market as a kind of packaged product, um, that falls outside the scope of regulation.
• 8:56
  SPEAKER_01: Uh in many ways, the product does.
• 8:58
  SPEAKER_01: The marketing and the sales of it does not.
• 9:01
  SPEAKER_01: Um, but people for many years ignored that side of it.
• 9:04
  SPEAKER_01: Uh, but I saw it gave me a very interesting under or very detailed understanding, uh, having worked with the regulatory lawyers on this project, of how a company can um comply with the regulations and um put itself out there in a limited way to the right audience to raise finance.
• 9:23
  SPEAKER_01: And there are many, many genuine companies out there who need to raise finance and can offer um you know the right opportunity for the right people.
• 9:34
  SPEAKER_01: It's um, but they're not mainstream investments, so therefore they they require a greater understanding uh and a greater deal of uh uh you know in-depth research.
• 9:44
  SPEAKER_01: So that was one side of what I did, but I don't want to focus on that too much, but I just want to say that the um my understanding of how a company can go about in a in a correct regulatory way of raising money uh came from working on that project where we worked closely with the regulatory lawyers to make sure that the company was doing things correctly.
• 10:04
  SPEAKER_01: Um at the same time, or slightly afterwards, I got involved with a company that was doing work with social organizations.
• 10:14
  SPEAKER_01: And they were doing something called investment readiness preparation.
• 10:18
  SPEAKER_01: And what this is worth is is with working with smaller social organizations that have a commercial arm to what they do and trying to get them to the point where they could successfully apply for and raise money from either financial institutions or from high net worth investors or what's regarded as an impact investor.
• 10:40
  SPEAKER_01: And these are wealthy people who specifically want to only invest or or invest a pro a set proportion of their money uh into impact projects, and we can talk more about that afterwards.
• 10:51
  SPEAKER_01: Um, but I got very involved with these with this stuff through uh Big Society Capital, uh, which is part of Big Potential, and they were providing grants for social organizations to um to have this investment readiness work, and that led me very nicely into a into um a side of financial services and a kind of different ear side of things that I really had never come across in my life as a financial planner, and that was working with social and environmental organizations, some of whom are um some of whom are commercial and and some of whom are set up as um either not for profits, so they reinvest all the money they get make back into what they do, or semi-commercial.
• 11:35
  SPEAKER_01: And um there's a whole there's a whole side of of things there that that um and funding that goes on for these type of organizations, and and financial advisors will see this a little bit through EIS uh investments, um, but many financial advisors won't know that there's a that there's another form of tax relief um called social investment tax relief.
• 11:58
  SPEAKER_01: And it's very similar to an EIS, um but it's for a social organization, and it offers different types of um profile company, different types of returns because with an EIS it's a purely an equity play, whereas with a social investment tax relief investment, you can get uh a debt, uh a fixed return uh for a number of years.
• 12:21
  SPEAKER_01: So, you know, and there's the market has has been adapting.
• 12:25
  SPEAKER_01: Um, and I saw another side of that when I was working um for doing this type of work.
• 12:31
  SPEAKER_01: Uh and I have to say, um I I thoroughly enjoyed working with some of these organizations because the good which they do and the and the um and and the messages and and the help which they can provide, I I thought was was really nice.
• 12:48
  SPEAKER_00: When so what when you were doing that and working with those organizations, um is that part of that's not part of impact and we kind of slightly doing it's it's not part of impact and invest at all.
• 12:59
  unknown: No.
• 13:00
  SPEAKER_01: And this is something that I did with another organization.
• 13:02
  SPEAKER_01: Uh and when and when and it was specifically set up to work with um with the funding that Big Society Capital and Big Potential were providing as grants for this type of work.
• 13:12
  SPEAKER_01: And when that funding stopped, um, the organization had no, you know, didn't continue because it had done what we did what we we wanted to do.
• 13:19
  SPEAKER_00: So it got but it but it got you involved in a side of financial services that you'd never really kind of been open to in the past, or you you've probably seen from a distance or something, but getting involved in it and understanding it, it was a completely different side of um it certainly wasn't financial planning traditionally, was it, as what you were used to?
• 13:38
  SPEAKER_01: It wasn't at all.
• 13:39
  SPEAKER_01: It was completely completely new environment um and fascinating.
• 13:46
  SPEAKER_01: And this this, I mean, and it came back to to tie this into being a financial planner.
• 13:51
  SPEAKER_01: Towards the end of my career as a financial planner, I'd have been increasingly recommending um what they called ethical portfolios at that time, social, socially responsible investments.
• 14:05
  SPEAKER_01: And the terminology has changed since then as the methodology behind it has changed.
• 14:10
  SPEAKER_01: But and at that point in time, where they selected ethical portfolios from mainstream fund managers in general, what they did was exclude the real the companies whose activities were really outside of that remit, so arms and tobacco and alcohol and gambling.
• 14:27
  SPEAKER_01: So they excluded all those companies, they excluded anybody who um whose working practice were really bad, so they had sweatshops or anything like that, and anybody else would fit into the portfolio.
• 14:38
  SPEAKER_01: And that was what they market was being offered back in the 1990s, 2000s, um, and and thankfully things have changed a lot since then.
• 14:48
  SPEAKER_01: But I know that when I was looking for ethical portfolios for my investors who and those who expressed an interest, and I was asking those questions as part of the planning um regime back in from about 2008 onwards, um, there was very little out there that you could actually match.
• 15:07
  SPEAKER_01: And many investors were very happy with a portfolio that just cut out arms and tobacco.
• 15:12
  SPEAKER_01: But some people would ask me specifically, can they invest into something that does good?
• 15:18
  SPEAKER_01: And many investors, if they're asked the right question and would actually say, yes, they would do.
• 15:25
  SPEAKER_01: And there's loads and loads and loads of research that's come out over the last few years that quantifies that most investors would invest a proportion of their money into socially responsible investments if they were number one offer that from somebody who had the expertise and given the right range of products.
• 15:45
  SPEAKER_01: Um, so um thankfully the world has changed, not the world has changed, but the offerings or the um environmental and social offerings which are available to investors has adapted and come on a huge amount uh over the last few years.
• 16:00
  SPEAKER_01: And now there are some portfolios out there from many of the mainstream fund managers that have good um, you know, when they say they're an ethical portfolio, they're an ESG portfolio, we can talk about some of the different things later on.
• 16:14
  SPEAKER_01: You actually look at their portfolios and you go, yeah, I can understand where that's coming from.
• 16:19
  SPEAKER_01: But there are without saying uh any of without naming names, uh we did some research um a couple of months ago on some of the major ethical funds that are out there uh on the market, and you'd be surprised by some of the top 10 holdings.
• 16:34
  SPEAKER_01: So a number of them will have um UK Gilts, which is within the, you know, it's not unethical, the UK government is ethical, but you know, it's not something you would automatically associate with um with being an ethical investment prudential, because you know, again, a good company, they probably do things extremely ethically, they might well have cut down on their paper usage and plastic usage and everything else, and but you wouldn't necessarily associate that with a company that's going out and doing good in the world.
• 17:07
  SPEAKER_01: And there are many other companies within these holdings that are like that.
• 17:12
  SPEAKER_01: They're good companies, they're well run.
• 17:14
  SPEAKER_01: They might be in reducing their carbon footprint, improving their governance, treating their staff better, looking after their supply chains, all the rest of the things, but that still is different to what some people are looking for when they're looking for something that does a something that's doing positive, and that's where impact comes in.
• 17:33
  SPEAKER_00: So, with okay, great stuff, beautiful.
• 17:35
  SPEAKER_00: Um, that reminds me a little bit like when you see chickens on the shelf in Tesco and it's got a sticker on it that says it's been reared outside free range, and then when you actually look into it, the free range is a kind of tiny little area that they're allowed to step outside in, but most of the time they spend it, spend their time in a in a shed.
• 17:53
  SPEAKER_00: Is that similar to what that is, really?
• 17:54
  SPEAKER_00: That it's cool, you know, it's got a sticker on it that says ethical, all ethical funds are you know, ethical funds, ethical.
• 17:59
  SPEAKER_01: Well, we see this all we see this all the time at the moment, and there's there's there's a term that's in our industry which is called greenwashing.
• 18:05
  SPEAKER_01: Greenwashing, okay, cool.
• 18:06
  SPEAKER_01: And you'll be amazed how many companies are now promoting themselves as green or ethical, where really what they've done is they've changed one or two things around.
• 18:16
  SPEAKER_01: So they've probably gone to a paperless office, um, they've probably stopped using recyclables, um, changed their packaging, put in some new policies about their governance of staff and and everything else, and said, right, here we go.
• 18:31
  SPEAKER_01: We're we're uh and other companies will do that by saying, Oh, we donate a certain percentage of our profits to doing this and that and the other.
• 18:38
  SPEAKER_01: Um, it's very common with carbon credits where companies are saying, Oh, we're offsetting with buying carbon credits, it's just greenwashing, really what they're trying to do.
• 18:48
  SPEAKER_01: And this is this is something that is um, you know, that is an issue for people.
• 18:52
  SPEAKER_01: I mean, how do you know if a company uh or an organization is is is really doing what they say they're doing?
• 18:58
  SPEAKER_01: Are they genuine?
• 19:00
  SPEAKER_01: And how are they really able to deliver the good or the impact that they say they do?
• 19:05
  SPEAKER_01: So these are some of the questions, and how you and how you measure that as well is another question.
• 19:10
  SPEAKER_01: Um, because I mean it's very easy to measure financial returns, but if an investor is investing for both financial returns and social returns, how do you measure the social returns?
• 19:19
  SPEAKER_01: You know, sometimes it's easy, you know, we fed this many people, uh, or we've housed this many people, or if it's a women's refuge, you know, for example, which you know they do generate women's refuges are income generating because they get housing benefits.
• 19:35
  SPEAKER_01: So an investor could, but that's another story.
• 19:38
  SPEAKER_01: Um, but um yeah, I'm I'm losing losing track of what I'm saying, but different things are different things are different.
• 19:45
  SPEAKER_00: No, absolutely.
• 19:45
  SPEAKER_00: I think that's the point that I was trying to make there, really, that you know, the world of financial services isn't um isn't high, you know, it's is is greenwashing a very much like lots of other companies are as well.
• 19:56
  SPEAKER_00: I think it's very trendy at the moment to be seen as being ethical and being green and environmentally friendly, but I think it's very easy to like slap a sticker on something and say it is, and then the consumer just goes, oh great, it says it is, it's painted green, so it must be, or there's a picture of a tree on it, so it must be doing good.
• 20:12
  SPEAKER_00: And um I'm I'm really keen to understand more about that within the financial services because obviously driven by profit, you know.
• 20:19
  SPEAKER_00: And you know, and and the more I read into like ESG and ethical investments and the next the handing down of wealth to the next generation, the next generation being more aware of asking questions and wanting to know where their monies are invested, but ultimately the impact that their investment is actually having or the money they're investing is having.
• 20:38
  SPEAKER_00: And what's quite clear is that there isn't what I can't see out there, a great deal of information that comes back to the consumer to say this is how your investment's performing, but also this is the impact it's having, this is how it's helping somebody, this is how it's you know making improvements to society or whatever it might well be.
• 20:56
  SPEAKER_00: And that's the thing, isn't it?
• 20:57
  SPEAKER_01: There's a big gap in that market, a big sort of uh area that's um that's becoming very uh open and it is, and particularly for retail clients, there's very little on the market that does that and provides both the funds that will or investment uh investments that will meet those requirements and reports back on the good that they're doing in a timely manner.
• 21:23
  SPEAKER_01: For high net worth investors and sophisticated investors, there are a number of um companies now who are doing this, uh both UK-based and internationally, where they have very focused investment funds, often centered around um certain aspects of the United Nations sustainable development goals, maybe focusing on one or two things.
• 21:44
  SPEAKER_01: And um, they do report back and they have ways of measuring um the impact which they have, and they report back on that regularly.
• 21:53
  SPEAKER_01: I would say that um that's right, because there does need to A level of sophistication from the investor to be able to appreciate and understand both the financial metrics and risks that go with it and the to understand the social side of it as well.
• 22:12
  SPEAKER_01: Um, but for a retail investor, many of the funds which are on the market um are have improved a great deal.
• 22:19
  SPEAKER_01: But for a financial advisor, these are these are topics that are becoming increasingly important.
• 22:25
  SPEAKER_01: Um, MiFID 2, when it comes in next year, is going to um require all financial um advisors, all financial planning processes to consider an investor's needs for ESG, uh environmental and social governance as part of the investment process.
• 22:43
  SPEAKER_01: Because um, I mean they these this not because of anything, apart from the fact that that's the regulation.
• 22:49
  SPEAKER_01: And this is MiFID too, it's coming in Europe wide, and it's gonna transform the way or the inflows that go into uh ethical or social socially responsible portfolios.
• 23:02
  SPEAKER_00: So, how is is that gonna be in is that gonna change it because all of a sudden advisors are gonna have to be at have to be offering um a clear sort of route into ethical investments and be asking the questions of their clients as to whether or not they want to invest ethically.
• 23:17
  SPEAKER_00: How is it gonna do it?
• 23:19
  SPEAKER_01: Well, I think different companies will will set up systems that work with their way of working.
• 23:24
  SPEAKER_01: And they're but I suspect that if a company doesn't have uh an investment proposition that offers an ethical um portfolio or an ethical blend that could be mixed in in various proportions, then I think they're gonna find themselves the subject of um you know some compliance questions.
• 23:43
  SPEAKER_01: Fine, gotcha.
• 23:44
  SPEAKER_01: They've it's it's gotta it's got to happen because if you're asking investors the questions about whether they want to invest in such types of portfolios, you have to have an investment solution that sits behind that.
• 23:57
  SPEAKER_01: And the investment solution that sits behind that is gonna come in for most companies, is gonna come in two forms.
• 24:04
  SPEAKER_01: You're gonna have your mainstream ethical funds that do a little bit of the negative screening we talked about previously, but also are starting to have some positive um screening factors as well.
• 24:16
  SPEAKER_01: Um, and you're gonna that's gonna satisfy many investors, but some investors are gonna want to go one stage further and say, listen, I actually would like to know what I'm investing into, what good it's doing, and I actually prefer these things to those things.
• 24:30
  SPEAKER_01: So some people will say, actually, I'm concerned about the environment and I would like to invest into things that generate clean energy, for example.
• 24:37
  SPEAKER_01: And other people might say I'm more concerned about society, uh, and I would like to invest some of my money into something that might generate me, might generate me less money, press less profit, might not, but I can see um that it the source, the social good it's going to do.
• 24:53
  SPEAKER_01: Um, that's not gonna be everybody, and what we do isn't for all investors, and it certainly isn't for all investors for all of their money.
• 25:01
  SPEAKER_01: But what we do provide uh on our platform is if they do want to say, actually, what I would like to do is invest into something that does this or something that has this type of positive impact, that's where we come onto the uh into into the scenario.
• 25:16
  SPEAKER_00: All right, great stuff.
• 25:17
  SPEAKER_00: Well, Jeremy, listen, thanks so much for um for giving me an overview of your career today and why and how you really got into the mindset of ethical investing and um what seems to be now like a bit of a passion around that to the point where it's now uh you've taken your time out, you've done you've you've done a bit of work here and there, and now you've set up your own company called um impact invest to help um promote and raise awareness of of companies that are raiding that are looking to raise um money to be able to get their businesses off the ground that that fit within the the impact investing um market.
• 25:52
  SPEAKER_00: So can you just tell me a little bit about impact invest?
• 25:55
  SPEAKER_00: So what why did you set up impact invest?
• 25:58
  SPEAKER_01: Okay, so so first of all, let me say that um I can't I can't do this on my own.
• 26:03
  SPEAKER_01: So although I have impact invest, which is my business, which is which is the platform, um, we work in cooperation rather than competition with people.
• 26:12
  SPEAKER_01: Okay, so the platform the platform is hosted by Delio.
• 26:16
  SPEAKER_01: And Delio, fantastic organization, they host hundreds of platform, over a hundred platforms ranging from some of the very biggest banks to a number of social impact or ethical platforms, and they're regulated to do so.
• 26:31
  SPEAKER_01: So they have all the FCA permissions required to run a regulated platform.
• 26:36
  SPEAKER_01: Um, it's restricted to high net worth, sophisticated or investment professionals, and it's on an execution-only basis.
• 26:44
  SPEAKER_01: So um they have to understand what they're doing, which is why it's restricted to those types of categories of clients.
• 26:51
  SPEAKER_01: Um, but they have all the regulatory permissions to be able to do so.
• 26:54
  SPEAKER_01: So I couldn't be doing my business without without Delio.
• 26:57
  SPEAKER_01: And the second company that I work with very closely is called the Impact Group.
• 27:01
  SPEAKER_01: And I couldn't be doing this without the Impact Group.
• 27:03
  SPEAKER_01: The Impact Group are specialists in impact accreditation, they're one of the few impact accreditation bodies in the UK, and they run um the impact section or green section on what was formerly called the next market, which is one of the junior um markets in London.
• 27:21
  SPEAKER_01: So a little bit, uh probably for those people who don't know it, it sits just below the aim market in terms of size of company.
• 27:28
  SPEAKER_01: So they run the green section on that, and they have expertise within uh impact and particularly environmental side of things, which you know, which we need to be able to do this.
• 27:38
  SPEAKER_01: So uh when a company, when we're looking at company, we have expertise um from the regulatory side through Delio and from the social impact side uh through the impact group.
• 27:49
  SPEAKER_01: But at the moment, impact and invest, um, we have um this platform and we do marketing on behalf of companies that would like to raise funds from investors.
• 28:02
  SPEAKER_01: Quite often that goes hand in hand with other forms of financing as well.
• 28:06
  SPEAKER_01: We deal with institutional investors, uh, we deal with impact funds, we deal with family offices, we deal with high net worth and sophisticated investors.
• 28:15
  SPEAKER_01: Um, and what we have is a range of investments, all of which are linked to the specific United Nations sustainable development goals, which they address, uh, all of which are commercially, we we believe are commercially viable and have a chance to be successful.
• 28:33
  SPEAKER_01: Some of them have more risk than others, depending on whether they're a startup or they're a later stage company that's successfully trading.
• 28:41
  SPEAKER_01: But everything is clearly set out.
• 28:43
  SPEAKER_01: The platform is is um is kind of very different to what many financial advisors will have seen when they've seen an investment platform.
• 28:55
  SPEAKER_01: It's not a listing platform, so we don't just have a list of all the different investments that are on there.
• 29:01
  SPEAKER_01: Each investment that's on there, all the details of the company are there.
• 29:05
  SPEAKER_01: So financial information, directors and the directors' bios, videos, photographs, um, planning applications if that's what's required.
• 29:16
  SPEAKER_01: Um, we also bring we've also added information about how COVID's impacted on the companies.
• 29:22
  SPEAKER_01: We we bring up information about the impact which they do, and we bring up information on their financial projections and financial future.
• 29:29
  SPEAKER_01: So the platform itself is really kind of uh immersive experience for an investor.
• 29:36
  SPEAKER_01: Um, and we've had some amazing feedback from people who've never really seen anything quite like this before.
• 29:42
  SPEAKER_01: Um, so if an investor says, right, I'm interested in looking at energy propositions, for example, um, they can go on there, they can see three or four different things, uh, biomass and uh solar powers, solar power and other different things within that sector, and then they can see if there's anything they like.
• 30:00
  SPEAKER_01: And then if if there's something that's of interest to them, they can download the information, they can take it to their financial advisors and discuss it with them with the greatest of pleasure.
• 30:09
  SPEAKER_01: Um, but also what we do hand in hand with that is we run a series of webinars, and all the companies that are on the platform, um, they're there every few weeks presenting their companies, explaining what they're doing, showing where they're up to, um, to potential investors, so they really get an idea of what it is that they're putting their money into.
• 30:33
  SPEAKER_01: And we have a few, we have some funds as well, but for the majority of the stuff which we do like that, we're finding that um in this increasingly sophisticated age where there's more and more information available online and investors are starting to want to make, or in many cases, be involved with their own decisions, um, providing so much information in such an kind of immersive way um is really having a good uh a good reaction.
• 31:02
  SPEAKER_00: Did you find then prior to the platform being set up that it was very difficult to find companies that were impact, you know, impact investment opportunities?
• 31:13
  SPEAKER_00: Were clients finding it difficult to go out there and find impact uh investing opportunities?
• 31:17
  SPEAKER_00: Is that why you created the platform to bring a lot of these companies into one place or some sort of one-stop shop, if you like?
• 31:22
  SPEAKER_00: Because it sounds a bit like crowdfunding to me.
• 31:25
  SPEAKER_00: Crowdfunding.
• 31:25
  SPEAKER_01: Well, it's it is a little bit it is a little bit like crowdfunding.
• 31:29
  SPEAKER_01: So there's an element of crowdfunding in there, except um you know you can't invest 50 pounds and or if you invest 100 pounds, you get a discount on your toothbrush or a woolly jumper.
• 31:40
  SPEAKER_01: Um I mean, this is for these are for proper investors making proper investments.
• 31:45
  SPEAKER_01: So the minimum on the platform is£20,000.
• 31:49
  SPEAKER_01: Um, and there's a rigorous onboarding process.
• 31:53
  SPEAKER_01: Um, but the idea, the idea behind this really was number one, um, to be able to provide a resource for financial advisors coming into the changes that are coming in for next year to start educating and providing resource for financial advisors.
• 32:08
  SPEAKER_01: So, what we haven't touched upon is some of the training and training and material which we can provide for anybody who's interested in this around the whole subject of ethical investing, ESG.
• 32:19
  SPEAKER_01: Uh, we can put little kind of training packages together, which we can do on Zoom, going through all the different terms which are involved, looking at some of the funds and some of the breakdown of the holdings and seeing how they match or don't match what um might be required, and helping to um show some of the types of questions that they should be discussing with their clients.
• 32:43
  SPEAKER_01: They should be discussing them now, in my opinion, but certainly will have to do so from next year.
• 32:48
  SPEAKER_00: Um would this be part of like a financial advisor's CPD requirement as well?
• 32:53
  SPEAKER_01: Is that well we're hoping to build that in?
• 32:55
  SPEAKER_01: Um, I mean, there's no reason why it can't be, um, because we can do um, and we're just kind of putting this together at the moment because this this business is still fairly new.
• 33:04
  SPEAKER_01: Um, but we're putting together a little training package which revolves around the different terminology behind um socially responsible investment, ESG.
• 33:13
  SPEAKER_01: Um, there's there's lots of different terms and they have slightly different meanings, and quite often it's one as one has adapted from what's come before.
• 33:22
  SPEAKER_01: So it's it's interesting to know how that's that's all and how it all fits together.
• 33:27
  SPEAKER_01: We do a bit of training around social investment tax relief, and um that goes hand in hand with EIS tax relief because many companies do do still raise through EIS.
• 33:37
  SPEAKER_01: Um and that's quite an that's quite an interesting little snippet.
• 33:41
  SPEAKER_01: It takes about 10 minutes.
• 33:42
  SPEAKER_03: Yeah.
• 33:43
  SPEAKER_01: Um and then we can do um a little, we do a little presentation on how the regulation works through a platform like ours, because it's not, it's although it's regulated, it's not we don't give advice.
• 33:55
  SPEAKER_01: So it's a slightly different process.
• 33:57
  SPEAKER_00: So let's say, for example, I'm a financial planner and um I've got a I'm talking to my client, and my clients are very much interested in um ethical investment.
• 34:06
  SPEAKER_00: If I were any sophisticated investor, they had a million quid to invest and you wanted to chuck 20% of that into some impact investing, ethical investing.
• 34:15
  SPEAKER_00: And um I'm a financial planner and I'm using your platform.
• 34:21
  SPEAKER_00: What do I do?
• 34:22
  SPEAKER_00: Do I just introduce the client to you and you look after the client, or do I look after the I'm I'm obviously financial giving financial planning advice to the client.
• 34:31
  SPEAKER_00: Do I do I log into the platform and and do all the investments for the client?
• 34:36
  SPEAKER_00: How does it work?
• 34:36
  SPEAKER_01: Okay.
• 34:37
  SPEAKER_01: So you're getting into a very interesting, it's a very interesting question.
• 34:41
  SPEAKER_01: So before I answer that question, let me just go and throw something back a little bit.
• 34:46
  SPEAKER_01: Um that will depend upon very much upon how the advisor, what type of relationship he has with that high net worth sophisticated investor.
• 34:56
  SPEAKER_01: If that investor works kind of hand in hand looking at proposition, many sophisticated investors will look at things hand in hand with their financial advisor rather than just accepting recommendations.
• 35:07
  SPEAKER_01: Um, but it also depends upon whether a financial advisor wants to get involved with an advice process that takes them outside of their knowledge and comfort zones.
• 35:18
  SPEAKER_01: Because when they start getting into this side of things, the advice, and if you want to give advice, that recommendation is going to be based upon number one, the financial and risk considerations, but number two is the impact and social and environmental benefits.
• 35:32
  SPEAKER_01: And for most financial advisors, trying to give advice around the social and financial, a social and environmental side of things is beyond their expertise.
• 35:41
  SPEAKER_01: Um, and why should it be?
• 35:43
  SPEAKER_01: Why should why should why should we be able to do so?
• 35:45
  SPEAKER_01: So if a financial advisor wants to give financial advice on the matter, they can work with hand in hand with their with their investor through the platform and look at the and discuss them with their kind of having an adult joined up conversation with their with their client about how that's going to fit in with their portfolios.
• 36:05
  SPEAKER_01: But that's that process, the financial advisor is going to be taking some responsibility for the advice because they're giving advice.
• 36:12
  SPEAKER_01: And the risk is they might be giving advice on things based upon their ethical considerations for which they're not really sufficiently prepared.
• 36:20
  SPEAKER_01: So that's one option.
• 36:22
  SPEAKER_01: If they if they want to go down that route, we're very, very encouraging, and we will give financial advisor as much background information as we can and support to be able to do so.
• 36:31
  SPEAKER_01: Um, but we also geared up for a different type of operating, which is letting the client make their own decisions purely on an execution-only basis.
• 36:39
  SPEAKER_01: We can keep the advisor informed about what the client's looking at, what the client invests into if they give permission to do so, but then the financial advisor wouldn't necessarily have to give advice on the matter.
• 36:54
  SPEAKER_01: And they could also, if they wanted to, they could restrict their advice to the financial implications and say that the for all the ethical and social and environmental side of uh of whether you want to invest into this or not, you have to rely on the information which the platform provides.
• 37:09
  SPEAKER_01: And that is that is the reason that I wanted from the outset to have a platform that was regulated, because therefore a regulated financial planner or financial advisor can make an introduction to a regul another regulated entity.
• 37:25
  SPEAKER_01: So you could, if you had the right investors, say, listen, you want to invest some of your money into ethical environmental things.
• 37:32
  SPEAKER_01: I can't tell you which ethical and environmental investments are going to meet your social or environmental goals because I don't have that expertise.
• 37:41
  SPEAKER_01: What I can do is I can refer you to a regulated platform that does.
• 37:46
  SPEAKER_01: Because everything that's on there is assessed for all those different things.
• 37:50
  SPEAKER_01: It's linked to the relevant United Nations sustainable development goals, and we use the expertise of the impact group to be able to do the assessment to make sure this is all genuine and not greenwashing.
• 38:03
  SPEAKER_00: And you've got the impact groups as well that are part of it that are out there looking at the different types of investment opportunities out there to ensure that you're not just putting any old Tom Dick and Harry company onto the onto the platform as well.
• 38:16
  SPEAKER_01: Well, that's that's right.
• 38:17
  SPEAKER_01: And and um, you know, it's not just that it's any old Tom, Dick, and Harry, because there's nothing on the platform that where we don't know the people.
• 38:25
  SPEAKER_00: Okay.
• 38:26
  SPEAKER_01: Everything that goes onto the platform, we have to know the company, we have to know the directors, we have to understand their business models, we have to understand how it works financially, how and how it understand works ethically.
• 38:37
  SPEAKER_01: Um, but the the assessment of the ethical side of it is done by the impact group, uh, as much as more than me, because they have the expertise in that field.
• 38:47
  SPEAKER_01: And quite often this leads to companies getting impact accreditation or green accreditation, which is um, you may have heard the term a green bond, which is something that's been coming increasingly into the mainstream market.
• 39:00
  SPEAKER_01: Well, that's because that that bond issuer, the company that sits behind it, has had some form of green accreditation, and there are a few accreditation bodies around the world, and the impact group are one of those.
• 39:12
  SPEAKER_00: Okay.
• 39:12
  SPEAKER_00: So why should a financial advisor use impact and invest platform?
• 39:20
  SPEAKER_01: Okay, so number one, it's gonna meet the needs of some of some of their some of their clients, not all of their clients, and for not all of their money, but for some of their clients, um, if they can't meet those, and if they're asking those questions and can't meet those needs, they're that investor's gonna take that chunk of business elsewhere.
• 39:37
  SPEAKER_01: Because if they've identified they want to invest 20% into impact investments, things that hands-on investments that are going to have real impact, if that advisor can't offer it, they can still think to themselves, I still want to invest 20% of my money into this, I'll go and look for it myself, or I'll go and ask somebody else.
• 39:53
  SPEAKER_01: So once you're asking the questions about what you want to invest into and do how you know, and going down that route with their clients, they have to be able to offer that options, or that investor will ultimately find another way of getting that opportunity.
• 40:10
  SPEAKER_01: So that's the that's one thing.
• 40:12
  SPEAKER_01: The second thing we can offer them is a regulated route where we have a regulated platform that's also combined with the expertise to be able to genuinely identify opportunities that really are socially and you know responsibly ethic and environmentally ethical that really do have the proper impact because financial advisors, you know, many of them will not have that expertise or time to do so.
• 40:36
  SPEAKER_01: Having said that, there are now two level four qualifications available on the market for financial advisors in ESG investing.
• 40:44
  SPEAKER_01: So there has been an uptake in that, um, but it's not widespread, it's not mandatory.
• 40:52
  SPEAKER_01: And I suspect in most firms you won't find anybody who's who's taken that, got that, got that expertise or knowledge.
• 41:00
  SPEAKER_01: So um we can help with the and the final thing is we can help um financial planners um with their adjust their planning processes and provide them with the knowledge to be able to be one step ahead of their educated investors.
• 41:15
  SPEAKER_01: And believe me, and in when it comes to um social and environmental and ethical investors, um they're becoming increasingly well educated because the amount of information that's available uh on the internet uh has expanded exponentially.
• 41:32
  SPEAKER_01: The interest in this sector has expanded exponentially.
• 41:35
  SPEAKER_01: Um, prior to the lockdown, um, we were you were seeing people from all ages joining marches around the world protesting about the way the world is being run and the carbon footprint that's being left and how things need to change for the better.
• 41:51
  SPEAKER_01: Um, during the lockdown, Ipsos Mauri ran a poll asking people about their opinions to green and ethical investments.
• 41:59
  SPEAKER_01: And I can share that information with you afterwards if you'd like.
• 42:02
  SPEAKER_01: Uh the figures were 70 odd percent of people view that the um the climate crisis is the next biggest issue after COVID and needs to be addressed immediately afterwards.
• 42:13
  SPEAKER_01: Um, governments around the world are basing their recoveries uh for their economies around a green recovery.
• 42:21
  SPEAKER_01: Um there's so much that is being talked about, both from an individual investor or people who have money who are looking at these issues because they regard them as the issues of the future.
• 42:34
  SPEAKER_01: Um, surveys have shown that companies that embrace good ESG are gonna are in general outperforming companies that don't.
• 42:44
  SPEAKER_01: Um UBS did a survey last year that showed that the majority of their high net worth investors believe that companies that are embracing modern green technologies will outperform over the next 10 years and become the market leaders for the next 20 years, as the traditional companies tend to either have to adapt or will will reduce in size.
• 43:05
  SPEAKER_01: I mean, you only have to look at what's been going on with the oil producers, who are some of the biggest and regarded as the most stable companies to invest into 10, 20, 30 years ago.
• 43:15
  SPEAKER_01: I mean, the risk of investing into BP or Shell today, you know, people are not so I don't need to say anymore.
• 43:24
  SPEAKER_01: The the world is changing, and financial advisors have to be able to offer something that matches the requirement of their changing investors.
• 43:32
  SPEAKER_01: And this is not just millennials or young investors, these are also many retired people, um, people approaching retirement, people who have accumulated significant wealth in their lives, who are looking at it and saying, you know what, I've got enough wealth.
• 43:46
  SPEAKER_01: I will some of the money that I've got, I don't want to give it away, but I would like to invest it in a way that genuinely does good in the world, um, either environmentally or socially.
• 43:56
  SPEAKER_01: And if financial advisors can't offer that, that will.
• 44:00
  SPEAKER_01: Go somewhere else.
• 44:01
  SPEAKER_00: And also, I suppose thinking about the next generation, because if you are a an older, wealthier investor, like you say you've got your money, you've made your money, but you've got grandchildren, children, next generation coming through.
• 44:12
  SPEAKER_00: Um, I think again, ethically, you're thinking about their future, what the world's gonna look like when they get a bit older, and you start to look at your footprint and what you're doing in the here and now, and what can you change to make their lives a bit better?
• 44:25
  SPEAKER_00: Um, and that's the key thing as well, isn't it?
• 44:26
  SPEAKER_00: We're not just uh it's it's it's like I've got a daughter who's four years old, you know, she's she's gonna probably live to over a hundred years old.
• 44:33
  SPEAKER_00: You know, she's gonna have it's only now that I started thinking she's gonna have children, hopefully one day.
• 44:38
  SPEAKER_00: Um, and it's like, wow, that's a long time.
• 44:40
  SPEAKER_00: That's like 200 years now.
• 44:42
  SPEAKER_00: In reality, is the world gonna look like the world if if we continue on the way that we are continuing on now, is it gonna look the same way as it does right now?
• 44:49
  SPEAKER_01: You know, and um this this is this these are some serious things you've you've raised because just I'm gonna just throw a few little things at you.
• 44:56
  SPEAKER_01: Go on, Ed.
• 44:57
  SPEAKER_01: Um there's been bushfires in Siberia that have been running for 12 months, they never really died out.
• 45:02
  SPEAKER_01: Uh 35 degrees, centigrade in Siberia at the moment, or was last week, unprecedented heat waves.
• 45:09
  SPEAKER_01: Uh in Greenland, they lost six uh due to global warming, they lost 600 billion tons of ice last year.
• 45:18
  SPEAKER_01: Um, and probably some of the permafrost has been permanently lost.
• 45:23
  SPEAKER_01: But at the same time, we've had record heats and record bushfires in Australia, and we've had record flooding across the UK and Europe.
• 45:31
  SPEAKER_01: Um combined with this, I mean, this is the stuff that's in that's very much in the attention in the UK, but slightly outside of what's in the UK focus, is that the the runoff from some of the Himalayan melting of the Himalayan glaciers is rising water levels uh around India and the oceans in that part of the world.
• 45:50
  SPEAKER_01: So they're expecting that in another hundred years, um something like Mumbai, half a dozen major Indian cities are gonna be underwater.
• 45:58
  SPEAKER_01: Um they reckon that that that because of the just because of the glaciers and the melting there, because sea levels are gonna rise a foot within the next 20 years or something.
• 46:08
  SPEAKER_01: So less things are done.
• 46:10
  SPEAKER_01: I mean, this is scary.
• 46:11
  SPEAKER_01: Um and this is also something which is being addressed in by many, many, many good organizations and many large companies, many small companies, and we do, and I know we've focused on some of the smaller things on our platform, but we have some big organizations and some funds on there as well.
• 46:28
  SPEAKER_01: Um, but they are going out of their way to address some of these really serious um global issues, and the way that they are addressing them is very often commercially profitable.
• 46:39
  SPEAKER_01: And these are gonna be companies that are gonna be at the forefront and they'll be some of the biggest companies of the future, um, just because the way we do things has to change, and the companies who are at the forefront of that change, some but not all of them, are gonna be, you know, the the household names in the next 20 years.
• 46:59
  SPEAKER_00: And some of these pioneers then are on your platform.
• 47:02
  SPEAKER_00: Well, we hope so.
• 47:03
  SPEAKER_00: We hope so.
• 47:04
  SPEAKER_00: So, Jeremy, I I would be really interested to hear about some of the companies right now that are on your platform that are looking to raise some money.
• 47:11
  SPEAKER_00: Could you tell me a little bit about some of them, please?
• 47:14
  SPEAKER_01: Absolutely.
• 47:14
  SPEAKER_01: So I'll I'll just pick on two or three, which are UK companies.
• 47:19
  SPEAKER_01: Uh, I'll explain where they fit in with what they're doing, where they fit in with the kind of wider world, uh, what they're offering for investors, what the type of risk is, what type of investors they're looking for, which will give um financial advisors a really good idea of what we're doing and how we do it.
• 47:34
  SPEAKER_01: So the first company they manufacture wooden pellets from wastewood.
• 47:41
  SPEAKER_01: And you may not be aware of this, but under EU law, um what were formerly coal-burning power stations are starting to burn biomass.
• 47:52
  SPEAKER_01: And biomass, one of the main things that they burn within these power stations are wood pellets.
• 47:56
  SPEAKER_01: And this country imports, it's a national disgrace.
• 48:00
  SPEAKER_01: We import around 10 million tons.
• 48:04
  SPEAKER_01: Sorry, yeah, 10 million, yeah, 10 million tons of wood pellets per year to the UK, most of which, well, all of which come from Siberia and Russia and Eastern Europe or from Southern America are cut down from virgin trees to create wood pellets shipped around the world for us to burn in our power stations because they don't produce emissions like coal.
• 48:26
  SPEAKER_01: So it's an absolute nonsense.
• 48:29
  SPEAKER_01: However, this is becoming increasingly expensive and starting to become unviable.
• 48:35
  SPEAKER_01: It's a big, it's a big issue.
• 48:37
  SPEAKER_01: So the company we work with, they produce um similar types of pellets from waste wood that would otherwise be going into landfill.
• 48:48
  SPEAKER_01: So rather than having to pay for virgin uh wood to be shipped to the UK or for pellets to be shipped into the UK, they're taking wood that was otherwise going to landfill and making a clean fuel out of it.
• 48:58
  SPEAKER_01: They have a particular patented process called torification that creates um a pellet that has a higher calorific value and burns cleaner than wood.
• 49:08
  SPEAKER_01: Um and they're setting up a factory in the Northeast.
• 49:12
  SPEAKER_01: They have pre-sold everything that they can produce for the next five years from this factory to some local power stations and power and distributors.
• 49:23
  SPEAKER_01: So they know in advance that as much as they can make they will be able to sell to such an extent that they're looking at setting up immediately setting up new production lanes.
• 49:35
  SPEAKER_01: The markets they're the market, they can produce 50,000 tons a year or something like that.
• 49:40
  SPEAKER_01: The market is 10 million tons.
• 49:42
  SPEAKER_01: There's there's huge amounts.
• 49:44
  SPEAKER_01: They can produce these pellets from wastewood at a fraction of the price of bringing them in and their better pellets at a fraction of the price of bringing in virgin wood, cutting down the Amazon rainforest to produce rainfall, uh produce pellets.
• 49:57
  SPEAKER_01: So they're offering uh a two-year debt investment to investors to fund the the production to fund the manufacturing facility in the northeast uh to provide them working capital to get the production up to full full capacity.
• 50:11
  SPEAKER_01: Uh, they're offering a high yield for an investor for I think something like 12, 10 or 12% a year for two years, at which point they'll get the money back.
• 50:19
  SPEAKER_01: Um and that's and that's what they do.
• 50:21
  SPEAKER_01: It's very simple business, uh, very simple concept, huge market.
• 50:26
  SPEAKER_01: They can produce the pellets which they produce for something like 50%, without going to the diet the specifics, about 50% of the cost of bringing them in from wood from outside of the UK.
• 50:36
  SPEAKER_01: Uh they're not going to be affected by Brexit if there's any uh uh uh tariffs on wood, which there might well be, uh, and they produce it from wastewood.
• 50:44
  SPEAKER_01: So great circular economy all around.
• 50:47
  SPEAKER_01: So that's one company.
• 50:49
  SPEAKER_01: Second company we got on there, um, do um the next next generation, what I call next generation hydroponics.
• 50:56
  SPEAKER_01: So they grow food.
• 50:58
  SPEAKER_01: Um, this is not talking about growing cannabis or I was gonna say hydroponics.
• 51:04
  SPEAKER_01: So they they can grow food in any any urban environment, yeah.
• 51:08
  SPEAKER_01: Um, almost at any temperature.
• 51:10
  SPEAKER_01: It uses 95% less water than uh traditional farming methods.
• 51:15
  SPEAKER_01: And can these units can be installed in inner cities to provide um regular regular crops of green leafy vegetables, strawberries, etc.
• 51:24
  SPEAKER_01: Things that would otherwise, um, when they're out of season, be imported from from Morocco and places like that.
• 51:31
  SPEAKER_01: Um also it can be installed into into warm countries where they have uh water issues.
• 51:37
  SPEAKER_01: So it's an international project um and very, very interesting business.
• 51:43
  SPEAKER_01: Very, very, very modern, very high tech.
• 51:47
  SPEAKER_01: Um it's hydroponics, uh, it's um it's it's next generation hydroponics, so it's much more advanced than the the the hydroponic systems that you that are currently on the market.
• 51:58
  SPEAKER_00: So that's the sort of thing that can solve that's the sort of thing that can really solve famine and well it's gonna solve it's gonna solve malnutrition across the world.
• 52:06
  SPEAKER_01: It's gonna it's it could solve it could help solve a lot of problems.
• 52:10
  SPEAKER_01: I mean, the the one of the issues that we have in the world is uh a rapidly growing population and issues about how that population is going to be fed.
• 52:20
  SPEAKER_01: Um there's a there's there's a lot of movement away from eating meat because of the um the environmental impact of having too much meat.
• 52:30
  SPEAKER_01: Um, but still there's big problems about if the population grows, what how you feed them, particularly at times where there's maybe drought or flooding or more extreme weather conditions that are affecting crop production.
• 52:44
  SPEAKER_01: Um so this is certainly part of that solution.
• 52:48
  SPEAKER_01: I'm not saying it is the solution, but there is a massive space for this type of technology.
• 52:54
  SPEAKER_01: So that's that's the second example of what we do.
• 52:57
  SPEAKER_01: Uh, and then we've got um to give you something completely different, um, we have an organization that's raising funds for um providing care for children.
• 53:09
  SPEAKER_01: Right.
• 53:09
  SPEAKER_01: So they work with a number of local authorities, they provide uh residential care for children, um, but particularly they work in the teenagers and young adult space, where a um local authority will have a duty of care till the age of 22 sometimes, but statutory care finishes at the age of 18.
• 53:28
  SPEAKER_01: Quite often there's a gap in the market, and the provision of care um to some of the really needy, vulnerable people is is is a is a big issue.
• 53:37
  SPEAKER_01: And for many councils, they outsource that um and they give long-term contract to care providers to be able to do that.
• 53:46
  SPEAKER_01: Now, quite often this care which they do is which is residential care is based around having uh a three-bedroom unit where there will be a full-time residential worker along with two um supported people in that in that accommodation.
• 54:03
  SPEAKER_01: So there is a capital cost to be able to expand the operation of what they do.
• 54:07
  SPEAKER_01: There is a capital cost to being able to go out and buy basically buying more apartments and more houses to be had to be able to meet the demand which they're getting from the councils.
• 54:16
  SPEAKER_01: So they have the organization has long-term tenure contracts with councils for provision of services, and the money we're raising from investors is predominantly buying residential property.
• 54:27
  SPEAKER_01: So an investor is in effect, they're they're investing into something that they might well consider investing into themselves, which would be residential property.
• 54:35
  SPEAKER_01: Um, but what they're actually doing is, and and if things go wrong, there's an asset there to fall back upon, because that's what the money's gone into.
• 54:44
  SPEAKER_01: But what they're really doing is they're investing into the supported living for um some of the more vulnerable um and needy, needy people within our society.
• 54:54
  SPEAKER_01: So investors can get a dual return, they get some, and and having said that before go back, councils the councils under their contracts have to pay, it's quite they pay quite a lot of money for to these companies to provide these services because if you're paying somebody to live in uh accommodation with two troubled people, you know, you've got to have maybe have two people there retain, it's it's not cheap to provide this type of care if you do it properly.
• 55:19
  SPEAKER_01: Um, so it is a cash-generative business.
• 55:22
  SPEAKER_01: Um, it's there to be able to provide a return to investors, which they can do, but the money is ultimately the money is then ultimately used to buy a residential property, which is used to help these people.
• 55:32
  SPEAKER_01: So that's the the little cycle of how the investment works.
• 55:36
  SPEAKER_01: Very well-run business, um, very, very committed people behind it, committed to the idea of providing the best possible they care, which they can do for these people.
• 55:47
  SPEAKER_01: And running a good business and being profitable just comes on the back of that, because the profitability side of it is built into it from the contracts they have with the council at hopefully and housing benefits sometimes and um hopefully gains in the value of the properties over 10-20 years.
• 56:05
  SPEAKER_00: So I've I've been on the platform and I've had a look, and you know, without a shadow of a doubt, you can see absolutely everything, can't you, about the investment opportunity as well.
• 56:13
  SPEAKER_00: You know, so you're talking, you know, if there's you know certain contracts or or anything in place, you can you can look at it and what the forecasts are going to be.
• 56:20
  SPEAKER_00: And it's a very detailed analysis of what that investment is.
• 56:23
  SPEAKER_00: It's not just putting, oh god, I hope this works.
• 56:25
  SPEAKER_00: It's actually right.
• 56:27
  SPEAKER_01: So just to give you an example of with that last one, which is the the children's care, um, we will have on the platform for public viewing all the financial documents, no, not all the financial documents, their investors' investment memorandum.
• 56:41
  SPEAKER_01: And there'll be a there's a video on there going round one of the apartments showing the type of units which they they buy and and how they how they fit them out and how they work.
• 56:50
  SPEAKER_01: There'll be um some photographs of the um of that are relevant to what they do.
• 56:55
  SPEAKER_01: There'll be the the directors' bios and photographs, and then if an investor is interested in that and would like further information, they can sign an NDA to be able to access all their or equivalent to be able to access all their financial information and details of their contracts, which they've got with the with the local authorities.
• 57:14
  SPEAKER_01: So the information is there, it's only available to somebody who's prepared you know the commercially sensitive information.
• 57:21
  SPEAKER_01: Somebody you would they would have to sign a non-disclosure agreement, and that's at this kind of second level access.
• 57:27
  SPEAKER_01: But yes, it's all on our platform.
• 57:29
  SPEAKER_00: So the kind of vibe I'm getting from this is that um you're making it a lot easier for financial planners or sophisticated investors to find impact investment opportunities.
• 57:40
  SPEAKER_00: You're making it easier to understand what the opportunity is.
• 57:43
  SPEAKER_00: The platform itself is regulated and you're back, you know, you're backed as well and supported by other people that really understand exactly what impact investing is and how to select these types of companies.
• 57:53
  SPEAKER_00: Um you're also offering training and development and guidance for, say, financial planners who might be a bit unsure about how to position these types of uh impact investments to their clients and training and development.
• 58:07
  SPEAKER_00: And as as time progresses forward, there might well be CPDs and all those types of things.
• 58:11
  SPEAKER_00: So you're kind of bridging the gap, aren't you?
• 58:13
  SPEAKER_00: You're sort of saying, like, you know, here's a load of really great impact investment opportunities.
• 58:17
  SPEAKER_00: We're going to show you exactly what they're about, what they're looking for.
• 58:20
  SPEAKER_00: Um, and um you can you're making it easier to find the and easier and and screening the companies by the sounds of it to make sure they're the right type of company to be investing your money in.
• 58:31
  SPEAKER_01: I think you've summed that up pretty well there, Sam.
• 58:34
  SPEAKER_01: Um, really what I'm trying to do is bring my current passion for ethical, environmental, social investments, and blend that with my expertise and experience within financial services and the advice process to create something that financial advisors could use.
• 58:50
  SPEAKER_01: Um, make them aware of what's involved in terms of the risks and the responsibilities of using this type of um uh system, this type of platform, uh, and hopefully um, you know, to do some business out there, to raise money for some very worthwhile organizations.
• 59:07
  SPEAKER_00: No, it sounds really good.
• 59:08
  SPEAKER_00: It sounds really interesting as well.
• 59:10
  SPEAKER_00: I think from for you personally, I think what a great thing to get involved in.
• 59:13
  SPEAKER_00: If it's tick in the box for your own personal um social and ethical responsibilities as well and interests, I think what a great, great thing to get into.
• 59:20
  SPEAKER_00: Do you do you get to go out and visit these companies as well that are on the platform?
• 59:24
  SPEAKER_00: Do you get to sort of attend, you know, attend presentations and get see behind the scenes of some of these amazing companies and what they're doing?
• 59:31
  SPEAKER_01: Yeah, I do.
• 59:32
  SPEAKER_01: Uh unfortunately that doesn't extend to uh, you know, we don't it really doesn't extend to trips overseas or or hotels.
• 59:41
  SPEAKER_01: It's not like that.
• 59:42
  SPEAKER_01: Um, so um the kind of it's been a little bit difficult um over the last few months to do so, but I'll give you an example.
• 59:50
  SPEAKER_01: We have a company that uh works, uh does environmental and um spillage control within the construction and maintenance sectors, um, absorbs some spillage for hydrocarbons and chemicals, heavy metals.
• 1:00:02
  SPEAKER_01: They're doing some work uh along the river Irwell, uh where they're building flood defences.
• 1:00:07
  SPEAKER_01: And they're uh this company we work with just shorts a little bit downriver of the flood defences, they've installed their barrier, which will absorb any uh anything that gets into the river while the flood defences are being installed, which there's bound to be hydrocarbons and uh and some heavy metals that leak into the river.
• 1:00:25
  SPEAKER_01: So I was there at the River Irwell on the site site visit, well is on uh hardcapping on having a look at what you know what what type of things can be done.
• 1:00:36
  SPEAKER_01: Um, and I was there to see the presentations which the company made to Balfabiti, who were doing it, I think it was Balfabiti might have been Kia, surge the construction company saw how they interacted with the how the construction company are viewing this type of product.
• 1:00:51
  SPEAKER_01: And this is one of the big construction companies they have, they've now appointed regional sustainability managers.
• 1:00:58
  SPEAKER_01: And he was there saying, you know, we really like what you're doing.
• 1:01:01
  SPEAKER_01: If it works here, we're gonna roll this out for every project uh around the Northwest.
• 1:01:06
  SPEAKER_01: So there is a changing, it's this is what I was saying about how some of these companies of that were small, uh small today are going to be the winners of and the biggest companies of tomorrow.
• 1:01:16
  SPEAKER_01: Um, companies, so these big construction companies, two years ago just paid lip service to environmental, or five to certainly five years ago paid lip service uh to environmental issues when in certainly in big construction projects and maintenance and delivery.
• 1:01:32
  SPEAKER_01: Um the fines have risen dramatically, so they can now refined 20 million pounds if they have, uh which is which kind of uh wakes everybody up pretty quickly.
• 1:01:41
  SPEAKER_01: But suddenly, suddenly over the last two years, the focus has changed from there being the cheapest method of cleaning it up or remediating these problems to the best.
• 1:01:52
  SPEAKER_01: So they're now looking at how they can best keep um their environmental impact to the minimum possible.
• 1:01:59
  SPEAKER_01: And the companies that are helping them to do that by providing them with the ability to um to minimize their carbon footprints by, in this case, cleaning up pollution and spillage and and everything else, they're they're they're gonna grow massively over the next few years as the intake uptake of their product rises.
• 1:02:19
  SPEAKER_01: So it's gonna go, it goes, and this is typical, it goes from doing a trial with one project to saying, yeah, we're gonna use that across the region, to yes, we're gonna use that across the whole country.
• 1:02:30
  SPEAKER_01: And the same company, for example, is in is in trials with one stage of high speed two construction.
• 1:02:37
  SPEAKER_01: If they if they get that, the chances are that will then mushroom out to the whole of high speed two construction.
• 1:02:43
  SPEAKER_01: So a company that was doing very little developing their products little commercially two years ago, last year was starting to be revenue and profit generating, next year might be bringing in multi-millions of pounds.
• 1:02:56
  SPEAKER_01: So that's how sometimes you see the development of of some of the companies we work with.
• 1:03:01
  SPEAKER_01: Okay.
• 1:03:02
  SPEAKER_01: It's quite can be quite remarkable.
• 1:03:04
  SPEAKER_00: Great stuff.
• 1:03:04
  SPEAKER_00: So, Jeremy, if a financial planner who might well be listening to this podcast was interested um in finding out more, what what what should they do?
• 1:03:13
  SPEAKER_00: Should they contact you?
• 1:03:14
  SPEAKER_00: Should they log into a website?
• 1:03:15
  SPEAKER_00: What what you know, where where should I be directing them, Jeremy?
• 1:03:19
  SPEAKER_01: Um okay, so the first thing is they're very, very, very welcome to give me a bell.
• 1:03:24
  SPEAKER_00: Yep.
• 1:03:25
  SPEAKER_01: And I'm always happy to have conversations uh around this issue.
• 1:03:29
  SPEAKER_01: Um it's it's becoming my kind of passion.
• 1:03:32
  SPEAKER_01: Uh, we we as a household have changed the way we live as well.
• 1:03:36
  SPEAKER_01: And um I'm always happy to discuss this with anybody who wants to have a chat.
• 1:03:41
  SPEAKER_01: Um we're also happy to send um, we've got a video about the platform, which we're happy to share.
• 1:03:46
  SPEAKER_01: We've got a bit of marketing material, um, but we're always happy to invite people on, show them around, give them a kind of guided tour, explain how everything works, and and let people make their own decisions of whether it's something that they think they want to incorporate or not.
• 1:03:59
  SPEAKER_01: Um, we believe in cooperation rather than competition.
• 1:04:03
  SPEAKER_01: And this is something that we feel that we can cooperate with financial advisors to give them something extra to add to their kind of investment offering, and because we do it well, something that will increase their hopefully increase their standing and and reputation with that particular investment.
• 1:04:19
  SPEAKER_00: Okay, great stuff.
• 1:04:20
  SPEAKER_00: Well, okay, great stuff.
• 1:04:21
  SPEAKER_00: Well, Jeremy, thank you so much for your time today and and and um giving us an overview of impact and invest in the platform.
• 1:04:27
  SPEAKER_00: And um I think it certainly will be interesting to financial planners, without a doubt.
• 1:04:31
  SPEAKER_00: And I think um a lot of our listeners that are quite younger in uh the early stages of their career as well.
• 1:04:37
  SPEAKER_00: I think it um sort of raises an awareness to the impact um uh ethical investment investing is having on on the um on the profession.
• 1:04:46
  SPEAKER_00: So certainly something they're gonna be talking about more of.
• 1:04:48
  SPEAKER_00: And Mythod 2 comes in as well, as you rightfully said.
• 1:04:51
  SPEAKER_00: You're gonna have to be talking about it.
• 1:04:53
  SPEAKER_00: So it's a good time to start um looking into platforms like yours and and um expanding your knowledge, I would say.
• 1:05:01
  SPEAKER_01: I would agree, and I would I would encourage um all financial planners to take a look at the uh qualifications that are out there available now for ESG investing.
• 1:05:11
  SPEAKER_01: Uh it's something that's your clients are going to be asking you increasingly about.
• 1:05:17
  SPEAKER_01: And once you've started to go down that path, you'll suddenly realize that you need to have investment solutions that will match that.
• 1:05:25
  SPEAKER_01: And we're very happy then to have a conversation.
• 1:05:27
  SPEAKER_00: Great, lovely.
• 1:05:28
  SPEAKER_00: Well, thank you so much for your time today, Jeremy.
• 1:05:30
  SPEAKER_01: You're very welcome, Sam.
• 1:05:32
  SPEAKER_01: Thank you very much indeed.
• 1:05:33
  SPEAKER_01: Pleasure to be.
• 1:05:34
  SPEAKER_01: Bye bye.