The Nuts & Bolts of Impact Investing at LNWM/WAM

Various tools

What distinguishes impacting investing at LNWM/WAM for clients who want to invest for financial return as well as environmental and social benefit? Chief Impact Officer Justina Lai answered this and many other questions in a recent in-depth Q&A. Below is an excerpt:

Justina: I would say there are five key differentiators.

#1. Impact strategy. We work with our clients to articulate, develop and execute upon an overarching impact investing strategy. This can include a “theory of change” focused on specific impact goals. All the while, we ensure that we are adhering to their other goals and their portfolio’s financial targets – diversification, risk, return and liquidity. So it’s a total portfolio approach and process.

#2. Implementation. The merger of LNWM and WAM and our subsequent scale enables us to expand the depth and breadth of the impact strategies available to our clients, as well as the investment vehicles used to execute those strategies, including separately managed accounts (SMAs) and private funds.

#3. Impact reporting/management. We provide detailed and customized reporting to our clients on how their impact strategy is being executed and the results, using both qualitative and quantitative impact metrics. I think the depth of this reporting is quite unique in our industry and something we will be rolling out for all clients in the coming year. We also manage our clients’ portfolios for broader and deeper impact, actively engaging with our managers and others to make collective progress on ESG, DEI and climate action.

#4. Shareholder advocacy. We are likely one of the most active wealth managers when it comes to enabling our clients to support shareholder proposals. For the 2023 annual meeting season, our clients have signed over 700 authorization letters to file, co-file and support 95 shareholder resolutions. [See our latest Shareholder Resolution Impact Report.]

#5. Integrated impact. We seek impact alignment with the asset managers we work with including their business practices/operations and how investment decisions are made and by whom. This extends to our own firm: Impact considerations are integrated into how we engage with each of our stakeholder groups (clients, employees, owners and the communities we operate in) and our internal activities (investment management, client services, and operations).