Measuring the health benefits
For investors attracted by the sector’s ability to deliver societal benefits, I believe it is important to gauge the positive impact that a company is having through its activities.
This is not always easy. After all, ‘not everything that can be counted counts, and not everything that counts can be counted’, to borrow a well-known phrase.
Nonetheless, measurability is one of the central tenets of impact investing. Looking at how a company intends to address a specific healthcare challenge and reach those who are in the greatest need, as well as the tangible steps it is taking to achieve this goal, is a sound place to start.
It is also important to consider how replicable its products or services are, and whether they would be provided if it did not exist or was not funded. Crucially, as impact investors, we must also consider the materiality of those products or services – for instance, how does a new drug save lives?
Improving lives can have an equally significant impact. ALK-Abelló, for example, is a pharmaceutical company that specialises in developing products for the more than 500 million people worldwide who suffer from allergies.
Among its innovations have been immunotherapy tablets against some of the most common respiratory allergies – including grass pollen and house dust mites – that allow allergy patients to self-administer from the comfort of their own home. Innovations like this can positively transform lives, helping realise Goal 3 of the SDGs.
Pursuing healthy returns
When investing for impact, it is important to analyse companies on their own merits. In every sector there will be leaders and laggards.
By providing capital to companies that have a demonstrably positive impact on people’s health, long-term
shareholders can help them develop their businesses, and therefore contribute to longer and healthier lives.
Through the investments we make, I therefore believe we can aim to have a positive societal impact over the longterm, alongside sustainable financial returns.
About Ben Constable-Maxwell
Ben is Head of Sustainable and Impact Investing, M&G. He joined M&G in 2003 as an Investment Specialist supporting the Global Equities team. He then moved to the Corporate Finance and Stewardship team in 2013, where he began focusing on corporate governance and ESG at international companies. Ben has been responsible for developing the incorporation of ESG in M&G’s investment processes and sits on M&G’s Responsible Investment Advisory Committee, which oversees Responsible Investment activities at M&G including the firm’s membership of the UNPRI. Ben graduated from the University of Newcastle-upon-Tyne with an Honours Degree in Classics before spending four years in the Equities team at Invesco Perpetual.