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T. Rowe Price Global Impact Equity Fund
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The Intergovernmental Panel on Climate Change (IPCC) projects tremendous damage to the global ecosystem and human society if temperature increases cannot be limited to 1.5 degrees. To keep global warming to no more than 1.5°C, emissions need to be reduced by 45% by 2030 and reach net zero by 2050.
The path to net zero will be multi-dimensional and long-lasting and can be achieved through:
Reducing greenhouse gases by increasing energy efficiency, better managing our carbon and methane emissions
Promoting healthy ecosystems by protecting air quality, land use, freshwater and oceans.
Nurturing circular economies through waste reduction, recycling and efficient consumption.
While the focus in the past has been on renewables, public equities present unique and untapped investment opportunities that can help solve for net zero such as energy efficiency, decarbonisation of heavy industries or waste management.
We focus on companies with strong business moats, expert capital allocation and high-quality management.
Linde, a leading global industrial gas company, enables the decarbonisation of heavy industries (manufacturing, energy, chemicals, metals) thanks to its R&D and operational excellence. Linde is also a key enabler of green hydrogen and carbon capture & storage (CCS) technologies.
Impact activity: Decarbonisation & carbon capture
Impact KPI: 90 million tonnes of CO2e avoided through products in 2022.1
Waste Connections, is the third largest waste management company in North America. Waste Connections has a strong impact thesis focused on mitigating & recovering methane emissions from putrescible municipal landfill waste.
Impact activity: Reducing methane & other GHGs
Impact KPI: 29.0 billion cubic feet of biogas recovered and 2.18 million tons of collected waste in 20222
1 Linde 2022 Sustainability report
2 Waste Connection 2023 Sustainability report
The specific securities identified and described do not represent all of the securities purchased, sold, or recommended for the portfolio, and no assumptions should be made that the securities identified and discussed were or will be profitable.
The World Health Organisation estimates 422 million people worldwide struggle with diabetes which links to 1.5 million deaths each year. Obesity and other metabolic risk factors are the dominant drivers of disease globally, costing the global economy c.2.5% of global GDP according to the World Obesity Foundation.
Recent advances in GLP-1 drugs, a type of anti-obesity medication, represent a watershed development in the health care sector given their efficacy in treating both diabetes and obesity. Evidence is emerging that they offer benefits beyond treating obesity and diabetes.
GLP-1s are likely to have a major impact on health outcomes thanks to a rapid expansion which will be driven by new product launches such as oral medication, capacity increases, improving reimbursement/access and geographic expansion.
The increasing use of GLP-1s should also benefit other industries such as medical technology, as more people can become eligible for surgical procedures.
Eli Lilly & Co is a pharmaceutical company with one of the most comprehensive diabetes portfolios. The impact thesis hinges on the company’s ability to further grow its impact in diabetes and to address obesity with a new class of GLP-1 drugs.
Impact activity: Providing health care solutions
Impact KPI: Approximately 55.8 million patients treated globally in 20233
Intuitive Surgical, is the global leader in robotic-assisted, minimally invasive surgery, and delivers substantial impact in healthcare by raising the quality of surgery and levelling the playing field of surgical ability. c.50m soft issue surgeries are performed annually worldwide but the penetration of robotic surgery remains extremely low (<5%) – we believe Intuitive therefore has a substantial runway to grow its impact over time.
Impact activity: Providing health care solutions
Impact KPI: 2 million patients treated in 20234
3 Eli Lilly 2023 year in review report
4 Intuitive Surgical 2023 ESG report
The specific securities identified and described do not represent all of the securities purchased, sold, or recommended for the portfolio, and no assumptions should be made that the securities identified and discussed were or will be profitable.
We believe that AI can be a positive enabler for most of the United Nations Sustainable Development Goals (UN SDGs). AI can enable climate solutions thanks to analytical and predictive capabilities in fields such as power grid optimisation and reliability. In health care, machine learning technologies can assist in drug discovery and diagnostic processes, leading to earlier detection of diseases. On the social side, AI can bolster small and medium-sized enterprises' (SMEs') growth via software applications.
GoDaddy, enables small and medium-sized enterprise growth and formation with tools to create and buy online businesses. We are confident that the company is on track to accelerate revenue growth thanks to a strong management team, an innovative AI tool and an improving cost structure.
Impact Activity: Enabling Small Medium Enterprises (SMEs)
Impact KPI: 21 million customers served5
Although AI can enable high-impact solutions, further research on the balance of positive versus negative outcomes is needed. AI workloads require high power consumption and are energy intense. Furthermore, the growing importance of AI may lead to increased inequality due to the uneven distribution of computing resources worldwide.
Vertiv’s technologies help reduce data centres’ carbon footprint through cooling solutions, which are critical for effective infrastructure management and energy efficiency. Furthermore, Vertiv is pioneering water-free cooling solutions.
Impact Activity: Increasing Energy Efficiency
Impact KPI: 6.75 million gallons of water saved per year6
5 GoDaddy 2023 Annual report
6 Vertiv commitment to sustainability white paper, 2019
The specific securities identified and described do not represent all of the securities purchased, sold, or recommended for the portfolio, and no assumptions should be made that the securities identified and discussed were or will be profitable.
Whitepaper
There remains a hesitancy on the part of some advisers to engage clients on the topic of impact and responsible investing. Much of this hesitancy - about performance, compliance, or sensitive conversations - can be put down to false perceptions about client sensitivities, performance, and client risks. Choose from the common 7 myths below to see how we might reset your perspective.
Hear from the experts the key differences between impact, ESG and other ethical investing terms. And why impact stands out.
Host: Karen McLeod, Ethical Investment Advisers
Featuring: Hari Balkrishna, T. Rowe Price
Specialist advisers discuss strategies for engaging clients in impact investing discussions and understanding their preferences.
Host: Karen McLeod, Ethical Investment Advisers
Featuring: Justin Medcalf, Ethinvest and Tim Fitzpatrick, Ethical Investment Services
An enlightening adviser discussion on integrating impact investing into an investment philosophy and reporting for clients.
Host: Karen McLeod, Ethical Investment Advisers
Featuring: James Baird, JustInvest
Learn what areas clients can invest in through impact, how it has become investable and which clients resonate with which areas.
Host: Karen McLeod, Ethical Investment Advisers
Featuring: Hari Balkrishna, T. Rowe Price and Chris Lang, Ethical Choice Investments
I Class
Go to the fund details page to find out more about Global Impact Equity Fund.
Dual mandate portfolio which seeks both long-term capital appreciation as well as seeking to have a positive impact on the environment and society by investing in companies whose current or future business activities are expected to generate a material and measureable positive impact under one of the following three impact pillars ("Impact Pillars"):
^The Management Fee for the T. Rowe Price Global Impact Equity Fund - I Class is 0.85% p.a. and the Indirect Cost is 0.00% p.a. Full details of other fees and charges are available within the Fund's Product Disclosure Statement and Reference Guide.
INCEPTION DATE
29 March 2021
BASE CURRENCY
AUD
MANAGEMENT FEE & COSTS^
0.85% p.a.
APIR CODE
ETL6342AU
BENCHMARK
MSCI All Country World ex Australia Index (net of withholding tax)
Past performance is not a reliable indicator of future performance.
In this Education series, Alexandra Brown, Founder and CEO of Ethical Invest Group and Hari Balkrishna, Portfolio Manager, share important tips and insights for having better client conversations around impact and responsible investing.
Watch our series of videos where Hari Balkrishna explains the meaning of impact investing and elaborates on our impact charter, philosophy and measurements.
The Responsible Investment Association Australasia (RIAA) champions responsible investing and a sustainable financial system in Australia and New Zealand. RIAA has created these tools for advisers to better understand and navigate their clients towards responsible investment products and advice.
Biotech and GLP-1 deep dive
Energy transition is far more than just a "net zero" mission
Are you curious to know what AI means for impact investing?
How innovations in artificial intelligence, health care, and the energy transition can create value.
How impact investing is gaining recognition as a credible way for investors to back companies that deliver positive impact and financial returns
Pursuing social and environmental impact alongside financial returns
Using measurement and engagement to tackle ESG fractures head-on
Hari believes investors are ready to make a more active choice to favor companies that can deliver positive environmental and social impact
GLP-1 treatments are poised to reshape the health care sector
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**The views and opinions expressed in the article are those of the Investment Professional at the time of the interview and are subject to change without notice. It is not intended to be securities recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. The article is used with permission from Forbes Australia.
T. Rowe Price Global Impact Equity Fund has been certified by the Responsible Investment Association Australasia according to the strict operational and disclosure practices required under the Responsible Investment Certification Program.
See www.responsiblereturns.com.au for details. The Responsible Investment Certification Program does not constitute financial product advice. Neither the Certification Symbol nor RIAA recommends to any person that any financial product is a suitable investment or that returns are guaranteed. Appropriate professional advice should be sought prior to making an investment decision. RIAA does not hold an Australian Financial Services Licence.
Additional Disclosures
The trademarks shown are the property of their respective owners. T. Rowe Price is not endorsed, sponsored, or otherwise authorized by or affiliated with any of the trademark owners represented by these trademarks.
The specific securities identified and described are for informational purposes only and do not represent recommendations or statement of opinion intended to influence a person or persons in making a decision in relation to investment. It does not represent all of the securities purchased, sold, or recommended for the portfolio, and no assumptions should be made that the securities identified and discussed were or will be profitable.
Important Information
Equity Trustees Limited (“Equity Trustees”) (ABN: 46 004 031 298, AFSL: 240975) is a subsidiary of EQT Holdings Limited (ABN: 22 607 797 615), a publicly listed company on the Australian Stock Exchange (ASX:EQT). Equity Trustees and T. Rowe Price Australia Limited ("TRPAU") (ABN: 13 620 668 895, AFSL: 503741) are, respectively, the responsible entity and investment manager of the T. Rowe Price Australian Unit Trusts. Available in Australia for Wholesale Clients only.
A Target Market Determination for each T. Rowe Price Australian Unit Trust (or class of units in a Trust) is available here. It describes who the financial product is likely to be appropriate for (i.e. the target market), and any conditions around how the product can be distributed to investors. It also describes the events or circumstances where Equity Trustees Limited, the responsible entity of the T. Rowe Price Australian Unit Trusts may need to review the Target Market Determination for the financial product.
Past performance is not a reliable indicator of future performance. The price of any fund may go up or down. Investment involves risk including a possible loss to the principal amount invested. For general information purposes only, does not take into account the investment objectives, financial situation or needs of any particular investor. For further details, please refer to each fund's product disclosure statement and reference guide which are available from Equity Trustees (www.eqt.com.au/insto) or TRPAU (www.troweprice.com.au).
202408-3796462