005 – IMPACT INVESTING – HOW TO GROW YOUR WEALTH WITH INVESTMENTS THAT BENEFIT THE PLANET & SOCIETY
Can you get good returns on your investments whilst also having a positive impact on the planet? If you would like to consider impact investing, please contact abi@lchwealth.co.uk to arrange a chat. Damien Laroux is Head of Impact Investing at EQ Investors. EQ Investors are a discretionary fund manager focused on sustainable and impact investing. In this episode, Damien covers topics such as Trump, the environment, water waste, AI and weight loss drugs, as well as sharing how companies are being encouraged to have a positive and sustainable impact.
Lisa Conway-Hughes is a Chartered Financial Adviser, a Fellow of the Personal Finance Society and founder of LCH/WEALTH. Lisa regularly posts financial information, education and updates on her hugely popular Instagram account:
https://www.instagram.com/misslollymoney/
Book a one to one Financial Diagnosis with LCH/WEALTH here:
https://lchwealth.co.uk/lch_wealth_services/one-to-one-financial-diagnosis/
This content is to be used for information and educational purposes only and nothing contained in it is or is intended to be construed as individual financial advice. Financial advice must only be given on an individual basis. If you require legal advice, financial advice or any other expert assistance, you should seek the services of a competent and qualified professional.
Show Transcript
Transcript: With Lisa Conway-Hughes and Damien Laroux
Lisa Conway-Hughes:
You screen out the bad stuff, but you also try to have a positive impact on the world with your investments. You have a problem, there’s a solution – one that makes sense financially and also benefits the planet.
Welcome to today’s podcast. I’m here joined by Damien Laroux from EQ Investors. He’s Head of Positive Impact there, and I just want to pick his brains all about the portfolios, how they’re performing, and some hot topics from the news right now. So, welcome Damien.
Damien Laroux:
Pleasure being here. Thanks for the invitation.
Lisa Conway-Hughes:
So, positive impact investing – for anyone who doesn’t know – it’s a way of investing where you screen out the bad stuff but also try to have a positive impact on the world. Is that about right?
Damien Laroux:
That’s spot on.
Lisa Conway-Hughes:
What do you think are the biggest threats to this kind of investing? For example, is Donald Trump a big threat to positive impact investing in 2025?
Damien Laroux:
Yes, you’re right. It’s a bit of a threat in the sense that we’ll probably see the US pulling out of the Paris Agreement again. That would mean less government resources towards the climate transition. Things like renewable energy subsidies might be reduced, and companies may be under less pressure to report on their social or environmental impact.
But I think what’s really important for investors to understand is that these systemic issues are here to stay – and they’re growing. We’re seeing more wildfires, more flooding. People know they need to find solutions. Even if they’re not actively trying to decarbonise, they still have to adapt to a changing world.
There are so many companies offering solutions – like water conservation, efficient agriculture – that will thrive regardless of who’s president.
Lisa Conway-Hughes:
What are some examples of those solutions?
Damien Laroux:
Well, let’s take water. In the summer months, access becomes an issue. In the UK, over 30% of water from utilities is lost before it reaches the tap.
There are solutions even at home, like more efficient flushing. In agriculture, instead of spraying water over entire fields, you now have drop-by-drop irrigation. In places like India, systems are installed that water only the base of each plant – it’s incredibly efficient.
These solutions that have worked in countries with water scarcity are now making their way to places like the UK.
Lisa Conway-Hughes:
Do you think there’s an ESG backlash happening right now? What does that mean for sustainability?
Damien Laroux:
Yes, especially after Russia’s invasion of Ukraine. People began praising armaments as a way to fight Russia. In the US, it’s become quite partisan. We’ve seen climate change deniers and people criticising asset managers for supporting sustainability efforts.
But the loudest voices don’t always represent the majority. Most people, when the problems and solutions are explained, really do want to support them.
We also have to think about the “just transition” – making sure that any solution doesn’t leave Mr and Mrs Smith behind. Take heat insulation. It reduces energy bills and increases property value. But not everyone can afford it upfront. Messaging is key.
Lisa Conway-Hughes:
I always feel that as individuals, we can recycle and turn the heating down, but it feels a bit powerless. People forget the impact their investments can have.
Damien Laroux:
Exactly. And that’s where financial advisers come in. Most people are trying to do the right thing day-to-day. But through their investments, they can actually make a much bigger impact.
For example, you can support renewable energy projects or use your investment power to influence companies through what we call stewardship – pressuring companies to do better socially and environmentally.
Lisa Conway-Hughes:
Richard Curtis had that campaign a few years ago, didn’t he? He said that switching your pension to ethical investments had more impact on the planet than going vegan, never flying, and… I can’t remember the third thing, but it really stuck with me.
Damien Laroux:
Yes – and we’ve quantified some of that impact. I’ve got this report from our website. For every £100,000 invested in our portfolios:
- 1.88 tonnes of waste recycled (equivalent to two households)
- Renewable energy for two homes
- 635 litres of wastewater treated (equivalent to five households)
- And one person in a developing country gaining access to mobile networks.
Lisa Conway-Hughes:
That’s the one I found really interesting – why is access to mobile networks such a big deal?
Damien Laroux:
Great question. In the UK, we’ve got 5G, but in many parts of Africa or Southeast Asia, people still don’t have mobile access. The mobile phone is a gateway to everything – banking, market prices, healthcare.
For example, a farmer can check crop prices on their phone and decide when to sell. They can manage savings and financial planning from their mobile.
It’s a leapfrogging effect. In countries without traditional infrastructure, the mobile becomes the bank, the marketplace – everything.
Lisa Conway-Hughes:
Let’s talk about AI. Do you think it’s going to cause more problems than it solves? Are you optimistic?
Damien Laroux:
AI is fascinating. It’s enabling so much tech development – particularly in healthcare. For example, AI helps analyse scans more accurately for cancer detection.
But yes, AI can be environmentally damaging. It uses a lot of energy. For simple searches, use Google. You don’t need ChatGPT for everything.
Lisa Conway-Hughes:
Speaking of healthcare – what do you think about weight-loss drugs? Are you investing in them?
Damien Laroux:
Yes, we are. We invest in Eli Lilly and Novo Nordisk. About 20% of UK adults are obese, and over 40% are overweight. That creates huge costs for the NHS.
People assume weight loss is just about willpower, but science shows that once someone becomes obese, brain chemistry changes – making it harder to lose and keep weight off. These drugs can help, and they’re making a big difference.
From a societal point of view, it’s fantastic. People can regain mobility, return to work, contribute to the economy. Politicians need to look at the medium-term benefits.
Lisa Conway-Hughes:
Are these drugs available to low and middle-income countries?
Damien Laroux:
Yes – both companies have programmes making the injections available for free in developing countries. It could be revolutionary.
But for now, it’s important these drugs reach the people who need them, not just those who can afford them.
Lisa Conway-Hughes:
I don’t think many clients realise how active you are at EQ in pushing for change. Do you have examples of this?
Damien Laroux:
Yes. We tend to invest in good companies, but no company is perfect. We engage through coalitions, and we attend AGMs (Annual General Meetings) to hold companies accountable.
One example is Standard Chartered. They’re a UK-listed bank but very active in emerging markets – especially in Africa and Asia. They do a lot of great work lending to micro-enterprises.
But banks also have fossil fuel lending on their books – some legacy loans. We’ve been meeting with them for two years, encouraging them to create a plan to divest from fossil fuels.
We’ve also pushed them to separate their reporting – so we can see clearly what’s being done for social versus green lending. Initially, they blended both in one figure, which makes it hard to track climate progress.
They hadn’t realised that investors wanted that breakdown – but they’ve taken it on board.
Lisa Conway-Hughes:
You can’t just cut off funding to oil and gas companies overnight, can you? They employ people – they’re part of the economy.
Damien Laroux:
Exactly. That’s why banks need a phased plan – like by 2040, they’ll be out of fossil fuel lending. But in the meantime, they can encourage those companies to diversify and start shifting to more sustainable activities.
Lisa Conway-Hughes:
It’s fascinating. I could talk to you for hours. Thank you so much, Damien.
Damien Laroux:
Thanks for the invitation. It’s been a pleasure.
