How green partnerships are powering the future
The combination of insufficient scale and lack of track record has become a common hurdle in the creation of ESG-linked products. For Douglas Hansen-Luke, Executive Chairman of Future Planet Capital, the company’s mission of linking impact investment with innovation from leading universities is generating significant deal-flow and is vital for creating a sustainable future.
Founded in 2016, Future Planet is a fund manager that also offers bespoke co-investments to connect the world’s largest investors with innovation coming out of top universities. The company now works with eight universities and centres of innovation across the UK, US, India and Israel, aiming to ‘profitably impact’ the world’s most pressing challenges – health, climate change, education, sustainable growth and security.
When it comes to sustainability, though, Hansen-Luke says there is a lingering disconnect between supply and demand.
“There is plenty of client demand, but the market is product or supply constrained,” he says. “The biggest challenge for private bankers is that impact is something the majority of their clients want to talk about, but the reality is that there are few investable products in this space. Impact funds tend to be in niche areas and run by relatively new managers.
“Our own solution of linking impact with innovation provides track record, branding and significant deal-flow. Oxford, for example, has been innovating for 1,000 years. Facebook came out of Harvard, and Google from Stanford. That is our strategy to deliver scale. There’s simply so much demand, impact has become impossible to ignore.”
For the past year, Future Planet has been working with Barclays Private Bank on impact themes around climate change and infectious diseases, and their clients have shown a strong interest in the sustainability space.
“For the bank as a whole, impact has moved from being the preserve of a specialised department to becoming a concern of top managers and their department heads,” adds Hansen-Luke. “The next step will be incorporating impact and profit at all levels, so that relationship managers actually have products that enable them to prove the mantra of ‘doing well out of doing good.’
“We need to address global challenges profitably. To be sustainable, you must be able to pay the bills year after year. There’s nothing sustainable about a loss or laying off employees and disappointing customers. In order to grow, impact investing needs to emphasise profits and prove that it can be sustainable financially, in addition to all other aspects.”