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July 2023 / INVESTMENT INSIGHTS

Looking Further Afield for Impact

Innovative Impact Credit Investing

The breadth, depth, and liquidity of the credit markets provide investors with a wide variety of impact opportunities. Some of these are already labelled by third parties as having a positive environmental and/or social impact. 

But other impact credit opportunities may be under-researched or unlabelled, which doesn’t necessarily make them less valid. It’s an area where a diverse, consistent approach to identifying impact and deep, fundamental analysis can really pay off.

How do we invest in impact investments?

T. Rowe Price invests in impact investments with two goals in mind: we seek debt issuers that are on the right side of change—those seeking to deliver a positive environmental and/or social impact—but we also aim to generate attractive financial returns for our clients from these investments.

If we are investing further into the less-analysed areas of the credit markets to find impact opportunities, how do we ensure we’re comparing like with like? That comes down to the “five dimensions of impact” with which we seek to form our impact theses.

five dimensions of impact

For each potential impact investment, we state upfront what the strategic goal of the impact is, who will benefit, by how much, the debt issuer’s contribution to the impact outcome, and the potential risks that could derail the impact thesis.

To illustrate how we are looking further afield for impact, below we highlight four recent examples of our innovative impact investing approach. These are cases where T. Rowe Price has delved deeper into the credit universe to find investment opportunities to create a holistic set of positive outcomes for our clients, alongside a financial return

Download the full insight here: (PDF)

 

IMPORTANT INFORMATION

This material is being furnished for general informational and/or marketing purposes only. The material does not constitute or undertake to give advice of any nature, including fiduciary investment advice, nor is it intended to serve as the primary basis for an investment decision. Prospective investors are recommended to seek independent legal, financial and tax advice before making any investment decision. T. Rowe Price group of companies including T. Rowe Price Associates, Inc. and/or its affiliates receive revenue from T. Rowe Price investment products and services. Past performance is not a reliable indicator of future performance. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested.

The material does not constitute a distribution, an offer, an invitation, a personal or general recommendation or solicitation to sell or buy any securities in any jurisdiction or to conduct any particular investment activity. The material has not been reviewed by any regulatory authority in any jurisdiction.

Information and opinions presented have been obtained or derived from sources believed to be reliable and current; however, we cannot guarantee the sources' accuracy or completeness. There is no guarantee that any forecasts made will come to pass. The views contained herein are as of the date noted on the material and are subject to change without notice; these views may differ from those of other T. Rowe Price group companies and/or associates. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price.

The material is not intended for use by persons in jurisdictions which prohibit or restrict the distribution of the material and in certain countries the material is provided upon specific request.  

It is not intended for distribution to retail investors in any jurisdiction.

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Matt Lawton Portfolio Manager