Impact investments target measurable social and environmental benefits, alongside financial returns. But the term can be confusing, since it typically refers to one of two very different approaches.
At Prentiss Smith & Company, we have spent 40 years prioritizing environmental and social impact in all investments we make for clients. We consider both positive and negative impacts, in tandem with financial factors. Our approach is supported by in-house research, activist proxy voting, and ongoing corporate engagement. We also avoid funds, for a more direct view into each investment’s impact. While we believe our approach is unique, it fits one widely accepted definition of impact investing.
The other definition, used predominantly by investment professionals, refers to large capital or debt investments in start-up companies or untested projects. While such investments can certainly be worthy, they tend to carry greater risk than investments in established institutions. Such impact investments may also require very high thresholds of available assets, experience, and risk tolerance.
At Prentiss Smith & Company, we believe it’s possible to deliver impactful investments while at the same time managing risk and targeting strong financial returns. If that sounds like a fit, let’s talk.
We focus on company policies that progress the fight against climate change, promote a circular economy, or drive water and forest preservation. We rule out investments in the production, marketing, or distribution of fossil fuels, or in mining or agrochemicals.
We seek out companies with equitable labor practices, diverse workforces and transparent supply chains. We do not consider investments in defense or weapons, retail gun sales, private prisons, tobacco, gambling, or pornography.
We believe corporate policies and goals should demonstrate prioritization of all stakeholders, including employees, customers, shareholders and communities. We exclude companies we feel have broken trust with these stakeholders, and seek those that give back to communities.
To have a positive social or environmental impact, we believe an investment requires rigorous, internal research, pointed proxy voting, and direct communication with the institutions our clients invest in, to to help drive even more progress on key issues.
We fully integrate our investment research, so that financial, environmental and social factors are all considered throughout an investment decision.
We prioritize impact investments where products, existing progress, or ambitious, achievable goals suggest net positive contributions to environmental and social change.
We are not passive holders of stock. Instead, we engage directly with many portfolio companies to request specific, achievable progress in policy and operations.
We divest from many industries, including fossil fuels, defense and weapons, and private prisons. But we take this approach a step further by additionally excluding companies that primarily service or benefit from these and other, destructive industries.
We believe investments have more impact when we prioritize client values when voting proxies, rather than rubber-stamping corporate recommendations. Our policy includes support for board diversity, more equitable executive pay, better corporate disclosures, and shareholder resolutions pushing environmental and social progress.
950 Western Avenue Brattleboro, VT 05301
Copyright © Prentiss Smith & Company 2023
Lead homepage photo © Images of Vermont
The material contained in this website is provided for informational purposes only and should not be considered an individualized recommendation of any particular security, strategy or investment product. This web site is not intended to be used as a general guide to investing, or as a substitute for personalized investment advice, and it makes no implied or express recommendations concerning the manner in which any specific client account should be handled. If you have questions regarding the applicability of any issue discussed on this website to your own situation, you are encouraged to consult with a professional advisor of your choosing. Prentiss Smith & Co is neither a law firm nor a certified public accounting firm, and no portion of this website content should be construed as legal or tax advice.
No guarantee is made as to the accuracy, completeness or timeliness of any information, projections or opinions contained in this web site or upon which any such projections or opinions have been based. The information contained in this web site is compiled for the convenience of site visitors and is accepted by the site visitor on the condition that errors or omissions shall not be made the basis for any claim, demand or cause of action. Due to factors that may include changing market conditions or applicable laws, some content on this web site may no longer be reflective of our current positions or opinions. Some information on this site has also been obtained from published sources and/or prepared by unaffiliated third parties. While such sources are believed to be reliable, neither Prentiss Smith & Co nor its respective employees or representatives assumes any responsibility for the accuracy or completeness of such information. Hyperlinks to other web sites are not an endorsement, approval or certification of information, projections or opinions located at such web sites.
Investing in securities involves risk, including the loss of all principal invested. Other types of investments involve varying degrees of risk. There can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Prentiss Smith & Co), will be profitable or suitable for your portfolio or individual situation.