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Triple Bottom Line Investing

Triple Bottom Line Investing

All companies have not only a financial return, but also a social and environmental return. Whether intentional or not, businesses make an impact on their customers, employees, the community, and the environment. Some companies create value while others extract value. The only question is whether we – as investors – are going to take these non-financial returns into consideration.

At IMPACTfolio, our process involves what we call “triple bottom line” investing by seeking an environmental return, a social return, and a financial return. These three sources of return are what we refer to as our 3 P’s: Planet, People, and Profit.

ESG Investing, Denver Colorado, IMPACTfolio

Quantifying the Results

You may wonder whether a focus on these non-financial considerations will negatively impact your financial returns. Recent research has increasingly shown otherwise. A Morgan Stanley report from 2015 concluded that “investing in sustainability has usually met, and often exceeded, the performance of comparable traditional investments.” In addition, it found that sustainable funds averaged lower levels of volatility than traditional funds.*  

The following charts (click to enlarge) also illustrate that a sustainable or “responsible” approach to investing does not require sacrificing returns over the long term.**

Financial Returns


Social & Environmental Returns


*Additional info from Morgan Stanley Report: The research included the performance of 10,228 U.S. mutual funds over seven years.  The results showed that returns of “sustainable funds” (a term used for various types of funds using social, environmental, and values-based screening criteria) were equal to or higher than traditional funds 64% of the time.

**Source: Russell 1000 Index, CALCOR. Prior to June 19, 2015, CALCOR was known as the Calvert Social Index. CALCOR changed certain of the construction methodologies, including the adoption of the Calvert Principles and a sector-constrained capitalization weighting approach. All data prior to June 19, 2015 reflect the Index’s prior construction methodologies.

We manage two different types of portfolios: CORE and EXPLORE


Our Core portfolios are strategic allocations which means we manage to a specific allocation target and rebalance periodically to ensure that the allocation remains on track. The Core portfolios are optimized for tax efficiency based on your specific tax situation. The graph provides an example of the risk/return characteristics of three of our Core portfolios.

CORE portfolio socially responsible investing approach

explore portfolio socially responsible investment approach


Our Explore portfolios are tactically managed by using tools to respond to changing market conditions. We look for signs of relative strength as a way of identifying good buying opportunities and, conversely, we aim to sell when we determine signs of relative weakness. See our chart for a visual illustration of this strategy.

Sustainable Development Goals

In all of our portfolios, we invest with purpose by covering a wide spectrum of issues. We use the 17 Sustainability Goals established by the United Nations as a framework for our IMPACT investing approach. Our goal is not to focus on only one or two themes, but to seek out sustainable investing across the board in order to maximize the triple bottom line returns (planet, people, and profit).  

United Nations sustainable development goals

Positive Corporate Actions

Sometimes it can be easy to look around at the problems surrounding us and start to feel hopeless or cynical. It can be tempting to wonder what difference you can really make or doubt the impact of these corporations we seek to invest in. But, in fact, there are plenty of stories of companies who are making an IMPACT.

Below there are three examples of how the specific business decisions of companies can move the needle on real positive change.

positive corporate actions

Intel, socially responsible investing

  • Intel treats and returns approximately 80 percent of its water withdrawals to local communities.
  • Since 1998, Intel has conserved enough water to sustain 520,000 U.S. homes for an entire year.
  • In 2016, Intel established a 2020 water goal: invest in new global water conservation projects that are expected to save about 1.2 billion gallons of water per year.
  • In 2016, Intel completed 289 energy conservation projects, saving 121 million kilowatt hours (kWh) of electricity.
  • Since 2008, Intel has been the largest corporate purchaser of green power in the U.S., totaling 24billion kWh of green power.

Praxair, socially responsible investing

  • From 2010 to 2016, Praxair’s investments in energy efficiency resulted in nearly $700 million in savings, including avoiding more than 4.3 million megawatt hours (mWh), 2.6 million metric tons of carbon dioxide equivalent and 5.3 million cubic meters of water.
  • This savings is equivalent to 763 wind turbines installed or electricity use for 446,000 homes for one year or energy use for 319,000 homes for one year.
  • In 2015, Praxair’s eco portfolio represented 33 percent of its revenue or $3.5 billion.

Capital One, socially responsible investing

  • Capital One’s community finance team manages a $5 billion loan and investment portfolio focused on affordable rental housing.
  • While many low- and moderate-income families aspire to home-ownership, they often require affordable, quality rental housing while working to achieve their goal. Capital One works with local developers to invest in affordable rental housing and create local jobs.
  • In 2015, Capital One provided $1.4 billion in loans and investments, creating more than 11,000 safe, affordable places to live and more than 13,000 jobs across our markets.

Source: Calvert Research and Management, July 2017.

Corporate Changes Creating IMPACT

There are also changes being made at a leadership level through intentional shareholder engagement with corporate leadership on specific issues. Here are examples of how Calvert Funds, one of the leaders of sustainable investing, has initiated positive changes at two companies.

Colgate-Palmolive socially responsible investing

  • Calvert engaged Colgate-Palmolive on palm oil, a major source of deforestation, via shareholder resolution and dialogue.
  • The company committed to “responsibly source palm oil and other forest commodities to reach zero net deforestation.”
  • It has contributed $8 million to support sustainable palm oil production since 2013, and 77% of its palm oil and palm kernel oil purchases are now certified sustainable oils.

Smucker's socially responsible investing

  • Calvert filed shareholder proposals calling upon J.M. Smucker’s to make commitments to source sustainable coffee.
  • The company now sources 10 percent of coffee from certified sustainable sources.
  • In light of risks from climate change, Calvert has engaged Smucker’s to help farming communities adapt their methods for more resilient coffee production, helping millions of farming families worldwide.