Impact phrasebook

Certified B Corporations, or B Corps, are companies who meet high standards of social and environmental performance, transparency and accountability. To become a B Corp, businesses must go through a rigorous certification process, by B Lab (a charity), which measures their social, governance and environmental performance. To become certified, B Corps must sign a legal agreement to confirm their board members will always consider the impact on their stakeholders when making decisions.

The capturing and storing of green energy that isn’t needed at the time of generation and is saved until it’s needed.

Facilities which enable the capturing and storing of green energy that isn’t needed at the time of generation, releasing the energy when it is needed.

A standard or point of reference against which things may be compared.

The Better Business Act campaign is aiming to change UK law to make sure every company in the UK places people, profit and planet at the heart of their purpose and the responsibilities of their directors. The Better Business Act is a proposal to amend Section 172 of the Companies Act 2006 so companies are legally obligated to operate in a manner that benefits their stakeholders, including workers, customers, communities and the environment, while seeking to deliver profits for shareholders.

Refers to every living thing, including plants, bacteria, animals, and humans. Biodiversity is a term used to describe the enormous variety of life on Earth. It can be used more specifically to refer to all of the living species in one region or ecosystem.

This refers to our exposure through our funds to companies using biomass as a source of fuel.

The strategic use of public or philanthropic funding to attract additional private investment towards social or environmental objectives. Public or philanthropic capital may take on particular risks, provide guarantees or fund early development, making an opportunity more viable for commercial investors.

Usually referring to a trading bloc, for example, the European Union.

The sustainable use of ocean resources for economic growth, improved livelihoods and jobs, while preserving the health of the marine and coastal ecosystem.

Natural gas is used as the main feedstock (raw material) into a steam methane reforming (SMR), partial oxidation (POX) or autothermal reforming (ATR) process that creates the hydrogen. Carbon emissions are captured and stored using carbon capture and storage (CCS) technologies.

Coal is used as the feedstock (raw material) into the gasification process that creates hydrogen.

The tax that arises when an asset is sold at a profit, subject to jurisdiction and allowances.

The cumulative amount of carbon dioxide (CO2) emissions permitted over a period of time to keep within a certain temperature threshold.

CO2 is an important heat-trapping (greenhouse) gas, which is released through human activities such as deforestation and burning fossil fuels, as well as natural processes such as respiration and volcanic eruptions.

A not-for-profit charity who runs the global disclosure system for investors, companies, cities, states and regions to help manage their environmental impacts.

A carbon dioxide equivalent or CO2 equivalent, abbreviated as CO2-eq is a metric measure used to compare the emissions from various greenhouse gases on the basis of their global-warming potential (GWP), by converting amounts of other gases to the equivalent amount of carbon dioxide with the same global warming potential.

Carbon intensity compares the amount of emissions to some unit of economic output (e.g. GDP or per million £/$ of sales).

A market where carbon emission allowances are traded. 

The process of capturing and storing atmospheric carbon dioxide.

A gift of cash or property to a non-profit organisation.

A concept that relates to the use of regenerative materials in product development, and a shift in consumer behaviour that encourages those products to be kept in use for as long as possible. Circularity also provides pathways for reuse, recycling and biodegradation at the end of life.

The catastrophic and fast accelerating nature of global warming currently being experienced.

Risk assessments based on formal analysis of the consequences, likelihoods and responses to the impacts of climate change and how societal and regulatory constraints shape adaptation options.

CVaR is designed to provide a forward-looking and return-based valuation assessment to measure climate related risks and opportunities in an investment portfolio.

Two or more investors working together to engage a company or address a wider market issue. Collaboration can combine investors’ knowledge, influence and ownership rights.

Behavioural measure of reactivity along the investment journey — tendency to trade, monitor and react to events.

An ownership structure in which a relatively small number of investors hold significant stakes. This can give investors stronger governance rights or closer access to management, although it does not automatically result in positive influence or impact.

A lower number or less diversified portfolio of investments within securities, sectors, industries or geographical regions.

The Convention of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC). The COP is the highest decision-making body of the Convention. All States that are Parties to the Convention are represented at the COP, at which they review the implementation of the Convention and any other legal instruments that the COP adopts and take decisions necessary to promote the effective implementation of the Convention, including institutional and administrative arrangements.

Every year the UNFCCC hosts the COP to drive action on climate change. As of the start of 2022 there have been 26 COPs with the last being in Glasgow, Scotland.

The asset classes used by a corporation (in this case a financial services corporation) that are covered by any Science Based Target that has been set by that corporation.

The new standard for Net Zero plans for corporations set by the Science Based Target Initiative (SBTi). More information can be found here.

A measure of the proximity of performance between different investments.

Refers to the process through which everything is designed to be disassembled and safely returned to the soil as biological nutrients or re-utilised as high-quality materials for new products as technical nutrients without contamination.

Synonymous with fixed income – securities where the security issuer is obligated to repay investors the amount they borrowed plus an interest margin.

EU regulation, announced in 2023, which seeks to improve domestic capacity and supply chain security around the extraction, processing, recycling, and import of critical raw materials such as nickel and lithium by 2030.

Issues, conversations, and engagements that may be multi-faceted in their nature due to the number of thematic issues that may be in discussion. Where these issues are not clearly aligned to just one thematic area we refer to this as cross cutting.

A financial institution which securely holds securities and investments.

The removal or reduction of carbon dioxide (CO2) output into the atmosphere.

How significant or transformational an outcome is for the people, communities or environments affected. Depth considers the extent of change, not simply how many people or places are reached.

Can be used to mitigate an investor’s overall risk profile by diversifying a portfolio to invest in more than one type of asset, for example to protect against currencies, credit and interest rate moves. A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset (like a security) or set of assets (like an index).

When a company is directly involved in a controversial activity, such as manufacturing weapons or tobacco production.

When an investor owns part of the company through direct investment as opposed to investment via a fund.

Information formally provided by a company, fund or investor about its activities, risks, performance or outcomes.

Disclosure supports transparency, although the existence of disclosure does not necessarily mean the information is complete or comparable.

An expert advisory group made up of key financial market stakeholders and subject matter experts. The group provides independent advice to the FCA on the development and implementation of new sustainability-related financial disclosure requirements (‘disclosures’) and a sustainable classification and labelling system for investment products (‘labels’).

Investment decisions are made by an advisor rather than the end client.

Different types of investments, across a range of markets, that don’t rely on the same things to do well at any one time.

Donors can take several forms including individuals, families, or companies setting up a philanthropic vehicle to facilitate charitable giving.

A philanthropic vehicle which facilitates charitable giving on behalf of donors. DAFs are created under an umbrella charity of a sponsoring organisation which administers the fund on behalf of the donor.

A giving account established at a public charity. It allows donors to make a charitable contribution, receive a tax deduction and recommend grants from the fund over time.

A financial risk associated with a loss. An estimation of a security’s potential loss in value if market conditions result in a decline in that security’s price.

A measure of the sensitivity of the price of a bond or other debt instrument to a change in interest rates. The longer the duration the greater the sensitivity.

Investing in a business during the earlier stages of its development. Capital may help the business develop its product, test its model, recruit a team or begin serving customers.

The direct and indirect contributions of ecosystems to human wellbeing which have an impact on survival and quality of life. There are four types of ecosystem services: provisioning, regulating, cultural and supporting services:

A provisioning service is any type of benefit to people that can be extracted from nature;

A regulating service is the benefit provided by ecosystem processes that moderate natural phenomena. Regulating services include pollination, decomposition, water purification, erosion and flood control, and carbon storage and climate regulation;

A cultural service is a non-material benefit that contributes to the development and cultural advancement of people, including how ecosystems play a role in local, national, and global cultures; the building of knowledge and the spreading of ideas; creativity born from interactions with nature (music, art, architecture); and recreation; and

Supporting services are the natural processes, such as photosynthesis, nutrient cycling, the creation of soils, and the water cycle that sustain ecosystems. These processes allow the Earth to sustain basic life forms, whole ecosystems and people.

Countries engaging in global markets which are less economically developed than developed countries. Investments into companies in these countries could be more volatile due to certain risks such as political instability and/or weaker governance structures.

Also known as ‘cap and trade’, an ETS is a market-based, cost-effective approach towards reducing greenhouse gas (GHG) emissions. Governments economically incentivise firms, corporations, and other entities to cut emissions by setting a limit (a ‘cap’) on emissions and issuing permits within the limit that each allow for one tonne of GHG emissions. Permits must be obtained, either from the government or through trade with other firms, and surrendered per unit of emissions. The cap is lowered over time to ensure emissions fall. Firms therefore, if insufficient in their quantity of permits, must either reduce emissions or purchase more permits – where a given permit price is always equal to one tonne of CO2.

The process of reducing the amount of energy required to provide products and services.

How we influence as an investor. We have three levels of engagement – reactive engagement, proactive engagement and system-level engagement. Engagement activities can include meetings, email correspondence, calls and/or video conferences with an assets management team and/or investor relations.

The sum of the market capitalisation of ordinary shares at fiscal year end, the market capitalisation of preferred shares at fiscal year end, and the book values of total debt and any minorities interests.

A change in the condition of the natural world, including the climate, ecosystems and use of natural resources. Positive environmental impact might include reducing greenhouse gas emissions, protecting or restoring nature, preventing pollution or using resources more efficiently.

Environmental, Social and Governance (ESG) investing looks at the operations of a company and the potential environmental, social and governance risks associated with the way they operate.

Ownership shares in companies whose shares are listed and traded on a public stock exchange. Investments can fluctuate according to market conditions, the performance of individual companies and that of the broader equity market.

Focuses on investments that are aligned to certain ethical and/or moral principles. Companies and industries that are deemed to be “unethical” are negatively screened out and excluded from portfolios.

A filter applied to investments to exclude or limit exposure to companies, sectors, or regions involved in activities that conflict with an investor’s values. They help ensure that portfolios align with a person’s ethical, social, and environmental priorities.

A classification system, that establishes a list of environmentally sustainable economic activities. It has the potential to play an important role in helping the EU scale up sustainable investment and implement the European green deal. The EU taxonomy would provide companies, investors and policymakers with appropriate definitions for which economic activities can be considered environmentally sustainable. Through this, it should create security for investors, protect private investors from greenwashing, help companies to become more climate-friendly, mitigate market fragmentation and help shift investments where they are most needed. Currently there are both green and social taxonomies agreed by the EU.

The companies, sectors, and/or regions that an investment manager won’t directly invest in.

The amount an investment is linked to a particular ethical concern. There are two types of exposure: direct and indirect.

An externality can be both positive or negative and can stem from either the production or consumption of a good or service. An externality is a cost or benefit that isn’t financially incurred or received by the creator.

The financial gain or loss generated by an investment, including changes in its value and any income it produces.

The new standard for Net Zero plans specifically designed for the financial services industry. It is due to be finalised and available in 2024. More information is available here.

An investment that pays a fixed amount of interest like a bond and typically aims to preserve capital.

Fixed-coupon bonds, also known as fixed-rate bonds, are a type of bond that pays a set amount of interest to the bondholder at regular intervals, usually semi-annually or annually. This interest payment, known as the coupon, remains constant throughout the life of the bond.

The practice through which humans create, manage, plant, use, conserve and repair forests, woodlands, and associated resources for human and environmental benefits.

Decomposed buried carbon-based organisms that died millions of years ago. They create carbon-rich deposits that are extracted and burned for energy.

Predominantly stem from equipment leaks and qualify as unintentional losses. They may arise due to normal wear and tear, improper or incomplete assembly of components, inadequate material specification, manufacturing defects, damage during installation or use, corrosion, fouling and environmental effects.

A business’s ability to thrive in the future based on the information and evidence of what could happen socially, environmentally and economically.

A self-assessment a business can align themselves to, to ensure they’re managing and improving their social and environmental performance for the future by shifting their business to ‘positive pursuits’.

The practice of investing for financial return through the lens of female empowerment; considering the issues women and girls face around the world, the solutions to these challenges and the power of women’s leadership.

A UK tax initiative that enables tax-effective giving by individuals to charities in the United Kingdom allowing extra money to be claimed from HMRC.

Adopted at the COP26 UN climate conference in November 2021, the pact sees signatory countries increase climate ambition and action from the Paris Agreement in 2015, and sets out new rules to reduce greenhouse gas emissions including phasing down coal and a global carbon market.

The aggregate contribution of all countries’ activities which release greenhouse gases (GHGs) and strengthen the global greenhouse effect.

The hub at the centre of the ethical finance movement. GEFI curates independent conversations from a broad coalition of financial services stakeholders, as well as delivering practical projects, campaigns and research. We are a member of the GEFI.

A measure of how much energy the emissions from 1 tonne of a gas will absorb over a given period of time, relative to the emissions from 1 tonne of carbon dioxide (CO₂).

A financial donation to a charitable organisation that doesn’t have to be repaid and that’s used for charitable purpose.

Bonds that raise money for projects intended to deliver environmental benefits. These may include renewable energy, clean transport, energy-efficient buildings, pollution prevention or climate adaptation.

Renewable electricity and water are used to generate hydrogen using the power of electrolysis.

The six main greenhouse gases covered by the Kyoto Protocol: Carbon dioxide (CO2); Methane (CH4); Nitrous oxide (N2O); Hydrofluorocarbons (HFCs); Perfluorocarbons (PFCs); and Sulphur hexafluoride (SF6)

Investors are willing to pay a premium to hold a green bond over a conventional bond.

Natural gas is used as the feedstock (raw material) into a steam methane reforming (SMR), partial oxidation (POX) or autothermal reforming (ATR) process that creates hydrogen.

Information that is known to be real or true, provided by direct observation and measurement (i.e. empirical evidence) as opposed to information provided by inference.

Investment provided to an established but still-growing business to help it expand.

It can support activities such as entering new markets, increasing production, growing a team or developing new products and services

The likelihood that a company will expand and become more profitable in the future.

Headwinds refer to challenges or obstacles that make it harder for a business to succeed. 

A person with liquid assets over £1 million (thresholds can vary).

An illustration of the possible financial performance of a given portfolio using historical data of notable market events as a guide.

A zero-carbon fuel burned with oxygen; provided that it’s created in a process that doesn’t involve carbon.

At Tribe, impact means aligning investments to the desired outcomes of the United Nations Sustainable Development Goals (UN SDGs).

Investing with the intention of generating positive, measurable social or environmental outcomes alongside a potential financial return. Impact investing is an approach rather than a single asset class and can be applied across both public and private markets.

From climate change to gender equality, sustainable cities to government policy change, impact investing focuses on addressing major social and environmental challenges while aiming to generate financial returns.

Impact investing is often a way for investors to express their personal values through their investments: using businesses working to solve social and/or environmental problems.

To identify impact, we use our proprietary impact investment scorecard, which combines quantitative performance and qualitative due diligence.

An investment strategy that focuses on a specific impact area such as gender, poverty alleviation, climate etc. Gender lens investing, for example, is the practice of investing with an aim for financial return whilst also considering how those investments benefit women. Gender lens investing can include funding women-owned businesses, businesses with a strong track record of employing women, or companies that improve the lives of women and girls with their products and services.

Funding provided to support legal cases that seek financial redress or wider positive social or environmental outcomes. Potential impact could include access to justice, compensation for affected communities or changes in corporate and institutional behaviour.

The ongoing process of setting impact objectives, assessing potential impacts, monitoring performance and using the findings to improve decisions and outcomes.

A framework that hopes to make the practice of impact management mainstream. The framework identifies opportunities to consolidate existing sustainability resources, collectively address gaps, and coordinate with policymakers and regulators. More information can be found here.

The process of collecting and assessing information about the social and environmental outcomes associated with an investment. This may include quantitative indicators, qualitative evidence and comparison against an investment’s stated impact objectives.

A measure of comfort in accepting different levels of risk in pursuit of impact. A higher risk appetite implies a willingness to accept higher potential financial risk and volatility for greater social/environmental returns.

A measure of comfort in the balance between financial and social/environmental outcomes. A higher strength implies greater focus on social/environmental outcomes.

Based on research in sustainability and collaboration with leading behavioural scientists, the ImpactDNA™ process helps uncover and articulate the impact you want to have through your investments. An individual’s ImpactDNA™ is the backbone of their investment portfolio at Tribe.

An intuitive, forward-looking metric, provided by MSCI, that takes into account Scopes 1, 2 & 3 and forecasting how much the temperature of the world would increase if the whole economy had the same carbon overshoot or undershoot as the company in question, based on their projected 5 years of emissions and targets that have been set.

When a company supplies components or services used in controversial activities, such as a technology company providing software for weapons systems.

The rate at which prices increase over a period of time.

Refers to an Act in the United States, published in 2022 which sets in motion a suite of policies directing spending towards clean energy infrastructure, lower healthcare costs, and improved taxpayer compliance through the Internal Revenue Service (IRS).

A clear and deliberate intention to contribute to positive social or environmental outcomes through an investment. Intentionality distinguishes impact investing from situations in which a positive outcome happens incidentally.

The fixed return investors receive on debt securities. Usually refers to the rate set by Central Banks from which other debt instruments are valued. Declining interest rates generally increase the value of existing debt instruments, and rising interest rates generally reduce the value of existing debt instruments.

The objective of the IPCC is to provide governments at all levels with scientific information that they can use to develop climate policies. IPCC reports are also a key input into international climate change negotiations. Created in 1988 by the World Meteorological Organisation (WMO) and the United Nations Environment Programme (UNEP). The IPCC is an organisation of governments that are members of the United Nations or WMO. In 2022 the IPCC has 195 members. 

Investments that have the potential to provide both financial and impact returns. Investible securities that haven’t been through our impact investment scorecard yet. ~27,000 listed funds provided by MSCI ACWI and ~18,000 direct equities provided through a high-quality data providers.

Securities or financial assets, such as equities or fixed income instruments, that an individual uses to move their money in the hopes of increasing returns.

The actions an investor takes to support or increase positive impact. This may include providing capital, engaging with a company, exercising voting rights, sharing expertise or collaborating with other investors.

The Kyoto Protocol operationalises the United Nations Framework Convention on Climate Change by committing industrialised countries and economies in transition to limit and reduce greenhouse gas (GHG) emissions in accordance with agreed individual targets. The Convention itself only asks those countries to adopt policies and measures on mitigation and to report periodically. In 2022, there are 192 Parties to the Kyoto Protocol.

The six greenhouse gases are covered by the Kyoto Protocol. Carbon dioxide (CO2); Methane (CH4); Nitrous oxide (N2O); Hydrofluorocarbons (HFCs); Perfluorocarbons (PFCs); and Sulphur hexafluoride (SF6)

How easily an asset or security can be converted to cash. The frequency and amount an asset or security trades without affecting its market price.

The shift from an economy that depends heavily on high carbon fossil fuels and activities to a sustainable, low carbon economy with fewer carbon intense activities.

The “Magnificent Seven” refers to a group of seven highly influential and high-performing technology companies. These companies are known for their significant impact on the market and their strong growth potential. The Magnificent Seven includes:

1. Alphabet (Google)
2. Amazon
3. Apple
4. Meta Platforms (Facebook)
5. Microsoft
6. NVIDIA
7. Tesla

The value of a company that is traded on the stock market, calculated by multiplying the total number of outstanding shares by the present share price.

Needed to address a basic human or environmental need that doesn’t compromise the social or environmental integrity of society or the planet’s ecosystems.

How significant is the impact this company is having? What is the material difference it’s delivering?

Materiality is the importance of an issue to an investment, an organisation or the people and environments it affects. A financially material issue could influence financial performance, while an impact-material issue could represent a significant effect on people or the planet.

Social or environmental change that can be assessed using relevant evidence, indicators and, where appropriate, quantitative data. Not every aspect of impact can be reduced to a single number, so measurement may combine data with qualitative evidence.

A type of banking which provides financial services to low income individuals or groups of people who would otherwise have no access to finance.

Loans with a value less than $1000, usually associated with entrepreneurs in emerging economies in microfinance.

This approach aligns financial assets with mission outcomes in an effort to meet targeted financial returns and amplify the impact of programmatic activity. MRI includes both traditional investments seeking market rate returns and Program Related Investments (PRI), where the primary intent is a high level of mission-aligned impact. MRI is used primarily by foundations and other mission-driven organisations.

An index configured by MSCI incorporating selected companies from developed and emerging economies based on a minimum size criteria.

The world’s stocks of natural assets which include geology, soil, air, water and all living things. It’s from this natural capital that humans derive a wide range of services, often called ecosystem services, which make human life possible.

Natural gas is a non-renewable hydrocarbon used as a source of energy for heating, cooking, and electricity generation.

A process or “screen” that excludes securities from being included in portfolios based on specific criteria. For example, based on an ethical or social concern.

A third party data provider we work with to help us better understand the social and environmental performance of our clients’ portfolios.

Reducing absolute greenhouse gas emissions to as close to zero as possible. This is done via reductions in core emissions (through process efficiencies and product adaptation) across a business’s Scope 1, Scope 2 and Scope 3 footprint. The remaining carbon budget that is left is then assessed for whether the natural environment in its current state can absorb it. If it can’t (which is the case across the board in our current environment) additional natural carbon ‘sinks’ are created/ invested in to further capture and lock up this carbon. To deliver the Paris Climate Agreement, the Intergovernmental Panel on Climate Change (IPCC) has confirmed that we need to be net zero globally by 2050 with a c. 50% reduction in emissions by 2030.

Fresh funding provided directly to a company, fund, project or intervention. This capital may allow an organisation to start, expand or accelerate its activities. In external communications, “new capital” may be clearer and less likely to be confused with additionality.

A reduction or removal of emissions of carbon dioxide or other greenhouse gases. An offset is made in order to compensate for emissions made elsewhere.

Companies who demonstrate strong ESG performance and with no major controversies (e.g. bribery or child labour) but which don’t necessarily aim to tackle sustainability through their products and services. We don’t directly* invest in these businesses at Tribe.
*Whilst we don’t have direct investment in these businesses some of the funds we hold may do so.

Financing in which some or all payments depend on the achievement of agreed and measurable outcomes. It is a broad category that can include social outcomes contracts and other results-based funding arrangements.

The Oxford Principles for Net Zero Aligned Carbon Offsetting (the “Oxford Offsetting Principles”) outline how offsetting needs to be approached to ensure it helps achieve a net zero society.

Passive investing is a style of investment management associated with mutual and exchange-traded funds (ETFs) where a fund’s portfolio tracks a market index.

Charitable acts, often generous donations of money, to good causes with the view of helping others or society as a whole.

Pooled securities or pooled funds — also known as collective investment schemes — are a way of putting sums of money from many people into a large fund spread across multiple investments and managed by professionals.

The percentage of a portfolio that comprises a certain holding or type of holding.

Beneficial changes for people or the planet that occur through an organisation’s products, services, operations or wider influence.

The six Principles for Responsible Investment provide actions for incorporating ESG factors into investment practices.

Principle 1: We will incorporate ESG issues into investment analysis and decision-making processes.
Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices.
Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.
Principle 4: We will promote acceptance and implementation of the Principles within the investment industry.
Principle 5: We will work together to enhance our effectiveness in implementing the Principles.
Principle 6: We will each report on our activities and progress towards implementing the Principles.

The principles are overseen by PRI which is a leading, independent proponent of responsible investment. It works to understand the investment implications of environmental, social and governance (ESG) factors and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions.

Debt financing provided directly to companies or projects by investors rather than through publicly traded bonds. It can be structured around the needs of a particular borrower or project. The terms private debt and private credit are often used interchangeably.

Loans and other forms of debt financing provided outside public bond markets. The terms private debt and private credit are often used interchangeably.

Investment in privately owned companies, usually in return for an ownership stake.

Private-equity investors may provide capital and strategic support to help a company grow, improve or develop over time.

Investments in companies, assets or projects that are not traded on a public stock exchange.

Private-market investors may provide capital directly and can sometimes have closer involvement in governance, strategy and impact management.

Investments in real estate. Value is determined by changes in government regulation, interest rates or wider market demand.

The process through which an investor casts votes at a company meeting without attending in person. Votes may be submitted directly or through a voting platform or appointed representative.

Debt issued in publicly traded markets by companies, governments or other organisations. Public credit includes corporate and government bonds, as well as instruments such as green, social and sustainability bonds.

Markets in which investments such as shares and bonds can be bought and sold by a wide range of investors, typically through a public stock exchange, enabling wide, public ownership.

A company who owns, and in most cases operates, income-producing real estate. REITs own many types of commercial real estate, including office and apartment buildings, warehouses, hospitals, shopping centres, hotels and commercial forests.

Evidenced reductions in greenhouse gas emissions that can be traced, measured and qualified over time using data. The reductions are from actual decarbonisation activities, rather than forecasted or predicted emissions reductions or those emissions reductions that occur as a result of a change in asset allocation, for example.

Energy production technology that relies on unlimited natural sources, such as wind and solar.

Working within the main asset classes and securities, responsible investing covers a range of activities from exclusion/negative screening, through themes (cleantech, water, etc.), corporate engagement, to positive screening.

The UN established the Principles for Responsible Investing in order to promote this movement. One of the key tools in sustainable investment are environmental, sustainable and governance metrics (ESG). There are criticisms of a reliance on ESG because it focuses on companies’ activities, rather than their products and usage. Additionally, there are no uniform standards for ESG data which means it can be subject to varying levels of attestation, accuracy and audit.

Accounts for the potential return/profit of an investment whilst considering the potential risks and volatility that must be accepted with that investment in order to achieve it.

Assesses an investor’s level of willingness and ability to tolerate investment risk and the tradeoff between potentially earning a higher return or having a lower chance of losing money in a portfolio.

Also known as the S&P MidCap 400, the S&P 400 is a stock market index that tracks the performance of 400 mid-sized companies in the United States. These companies typically have market capitalizations between $3.6 billion and $13.1 billion. The index is designed to represent the mid-cap segment of the market, providing a benchmark for investors interested in this category.

The S&P 500, or Standard & Poor’s 500, is a stock market index that tracks the performance of 500 of the largest publicly traded companies in the United States. It’s one of the most widely followed equity indices and includes companies from various sectors, such as technology, healthcare, and finance.

The methodology that the Science Based Target initiative developed specifically for the financial services sector to help them understand how to set a Science Based Target. It can be found here.

The number of people, communities or environmental systems reached by an outcome, or the geographical and economic reach of that change. Scale should be considered alongside the depth, duration and significance of the outcome.

Provide a defined pathway for companies to reduce greenhouse gas (GHG) emissions, helping prevent the worst impacts of climate change and future-proof business growth. Targets are considered ‘science-based’ if they are in line with what the latest climate science believes is necessary to meet the goals of the Paris Agreement — limiting global warming to below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C.

Direct emissions from all business activities including emissions from any owned facilities and owned transport.

Indirect emissions from all electricity purchased by a business.

Other direct emissions from all activities, occurring from sources that aren’t owned or controlled by a business. These are usually the greatest share of any business’s carbon footprint, covering emissions associated with business travel, procurement, waste and water. For Tribe, this includes the investments we make.

A market in which an existing investment is bought from another investor rather than issued by the company or fund for the first time. In public markets, this includes the trading of company shares of debt, or financial derivatives. In private markets, secondary transactions can give existing investors a way to sell otherwise illiquid holdings.

A tradeable financial asset such as equities or fixed income.

Constructive dialogue between an investor and a company aimed at improving its practices, performance or outcomes. Engagement can cover financial, governance, social or environmental issues.

Proposals put forward by shareholders for consideration and voting at a company meeting. They may ask a company to change a policy, improve its disclosure or take action on a governance, social or environmental issue.

Smaller or mid-sized companies. Definitions vary by country, but in the US, companies up to a $10bn market cap. These companies may involve a higher degree of investment risk and volatility given there may be less publicly available information about the company and they tend to be less frequently traded on account of their smaller size.

Bonds that raise money for projects intended to deliver defined social benefits. These may finance areas such as affordable housing, healthcare, education, employment or access to essential services.

Housing provided for the disadvantaged or with specialised requirements, usually funded by local or central government.

A meaningful change in people’s lives or communities, such as improved health, greater inclusion, better access to essential services or fairer economic opportunities.

Social Investments are defined as the provision and use of repayable finance to generate social as well as financial returns. Social investment may occur in a variety of forms such as loans, equity and bonds.

Social returns are improved outcomes for society and range substantially – from, for example, improved individual health to employability amongst disadvantaged groups, to provision of community goods and services, to the community impact of reduced carbon emissions. Financial returns imply that the social investor will be able to get their money back in the future with a return. By this definition, grants, donations and other funds with no expectation of being paid back are not social investments”

Agreements in which payment is linked to the achievement of agreed social outcomes. Private or philanthropic investors may provide upfront funding for a service, with a public body or another outcome payer making payments if independently assessed results are achieved.

Socially Responsible Investing (SRI) Investing typically seeks to maximize returns within a framework of personal values. It employs three primary strategies: investment screening and Environmental, Social & Governance (ESG) analysis, shareholder advocacy and community/impact investing. The desire to have social impact and generate meaningful financial returns is driving the growth of SRI investment strategies.

How investors use their rights and influence to protect and enhance the long-term value and impact of their investments. Stewardship can include engagement, voting, monitoring, escalation and collaboration.

The practical actions an investor takes as part of its stewardship responsibilities, including engagement, voting, monitoring, collaboration and escalation.

Investment styles with certain attributes related to growth, value, geography and size.

Meeting today’s needs without compromising the ability of future generations to meet their needs, by working towards the attainment of the UN SDGs.

Bonds that raise money for a combination of eligible environmental and social projects. They combine characteristics of green bonds and social bonds and should not be confused with sustainability-linked bonds.

A range of measures being proposed by the UK’s Financial Conduct Authority (FCA) to develop and implement new sustainability-related financial disclosure requirements (‘disclosures’) and a sustainable classification and labelling system for investment products (‘labels’) in the UK for the financial services sector.

It is currently being finalised and covers 6 main areas:

1. Sustainable investment labels for investment products based on the nature of the product’s investment objective and how it purports to promote positive sustainability outcomes.
2. Consumer-facing product-level disclosures that summarise the sustainability characteristics of products with a focus on retail investors.
3. More detailed sustainability disclosures aimed at a broader range of stakeholders, including pre-contractual and ongoing performance disclosures at product level, and entity-level disclosures.
4. Product naming and marketing rules to prevent firms using sustainability-related terms in product names and retail-facing marketing materials unless the product in question qualifies for one of the sustainable labels.
5. A general “anti-greenwashing rule” for all regulated firms.
6. Rules to ensure distributors provide sustainability information to consumers.

Bonds whose financial characteristics are linked to the issuer’s achievement of predefined sustainability or ESG targets. Unlike green, social or sustainability bonds, the proceeds are not required to be used for specific projects. Instead, the issuer commits to achieving measurable sustainability performance targets, and the bond’s terms may change if those targets are not met. This definition aligns with the International Capital Market Association’s (ICMA) Sustainability-Linked Bond Principles.

A Tribe portfolio theme which involves investing in businesses and institutions that improve the well-being of humans and communities globally through increased access to things like education, healthcare and financial and digital products.

Development that meets the needs of the planet without compromising the ability of future generations to meet their own needs.

A Tribe portfolio theme which involves investing in businesses and institutions that prioritise the natural world through products and services that support the provision of things like energy efficiency, circular technologies and pollution prevention.

Mandatory ESG disclosure obligations for asset managers and other financial market participants. As of 10 March, 2021, SFDR enforces sustainability disclosure obligations for manufacturers of financial products (such as Undertakings for the Collective Investment in Transferable Securities (UCITS) and alternative investment funds (AIFs)) toward end-investors. It does so in relation to the integration of sustainability risks by financial market participants (i.e. asset managers, institutional investors, insurance companies, pension funds, etc., all entities offering financial products where they manage clients’ money) and financial advisers in all investment processes and for financial products that pursue the objective of sustainable investment. In addition, disclosure obligations in relation to adverse impacts on sustainability matters were added at entity and financial product levels, i.e. whether financial market participants and financial advisers consider negative externalities on environment and social justice of the investment decisions/advice and, if so, how this is reflected at the product level.

The EU SFDR applies to all financial market participants and financial advisers based in the EU. Investment managers or advisers based outside of the EU, who market (or intend to market) their products to clients in the EU under Article 42 of the Alternative Investment Fund Managers Directive (AIFMD), will also need to follow the SFDR disclosures.

Tribe’s Sustainable Impact Model Portfolio Service (SIMPS). The SIMPS portfolio range provides a combination of risk-adjusted returns and positive impact. SIMPS are liquid portfolios of daily traded funds and are rebalanced at least quarterly. The SIMPS is accessed via a financial adviser.

A Tribe portfolio theme which involves investing in businesses and institutions that prioritise the natural world and improve the well-being of people and communities through things like energy efficiency, circular technologies energy efficiency, circular technologies education and healthcare.

Companies who demonstrate strong ESG performance, with no major controversies, and which derive at least 50% revenue from products and services aligned with the delivery of the SDGs. We aim to invest in these businesses at Tribe.

A lasting change to the structures, rules, behaviours or relationships that shape how a wider system works. Rather than addressing only one symptom or organisation, systems change seeks to influence the underlying conditions affecting an industry, market, community or global system.

An investment approach that considers how investment decisions and investor influence can affect the wider systems on which long-term financial, social and environmental outcomes depend.

Tailwinds refer to positive factors that help a business grow and succeed.

The TCFD reports on the impact an organisation has on the global climate. TCFD has created a guiding framework that establishes common principles for how companies and other organisations should provide information on the risks and opportunities associated with climate change. The TCFD was created in 2015 by the Basel-based Financial Stability Board (FSB) whose role, since its establishment in 2009 after the global financial crisis, is to promote international financial stability. 

The TNFD is a global market-led initiative that helps organisations better understand their relationships with nature. It’s created a risk management and disclosure framework for organisations to report and act on nature-related risks nature loss presents to them. TNFD has been created to help financial institutions, corporates and service providers equip themselves with the information they need to support a shift in global financial flows towards nature positive outcomes.

A temperature pathway is an intended or forecasted change in the absolute warming that happens at global level over time. For example, the Paris Agreement’s goal is to limit global warming to well below 2 degrees, preferably 1.5 degree, which means reaching net zero in terms of emissions by 2050. A portfolio, therefore, may currently, with no changes in underlying business practices, currently be forecast on a pathway for 2.5 degrees of warming by 2050. An intended pathway would be to reduce that portfolio to no more than 1.5 degrees of warming by 2050.

The Paris Agreement is a legally binding international treaty on climate change. Its goal is to limit global warming to below 2°C, preferably to 1.5°C, compared to pre-industrial levels. This means reaching net zero in terms of emissions by 2050. It was adopted by 196 Parties at COP21 in Paris in 2015.

The exposure levels to certain companies, sectors and/or regions that are set at the portfolio level to ensure a maximum level of exposure.

Typically implies standard shares and bonds.

Companies who demonstrate strong ESG performance, with no major controversies and which derive at least 10% revenue from products and services aligned with the delivery of the SDGs. We invest in a small number of these businesses at Tribe that demonstrate a clear commitment to transitioning to future-fitness.

A transition pathway identifies areas of measures and performance improvement for a social, environmental and/or economic transition. For example, for a green transition in support of a low carbon future a transition pathway will include measures linked to decarbonisation to drive that change.

Making relevant information about material decisions, activities and performance clear and accessible to investors and stakeholders.

Transparency allows clients and other stakeholders to understand how an investment approach works and assess whether its objectives are being pursued.

Tribe’s two separate assessments of an investment’s financial and impact credentials — the potential monetary returns it may deliver as well as its social and environmental outcomes. The financial due diligence is led by Tribe’s chief investment officer and the impact due diligence is led by Tribe’s chief impact officer.

A person with investible assets in excess of £20 million (thresholds can vary).

The Sustainable Development Goals (SDGs), also known as the Global Goals, were adopted by the United Nations in 2015 as a universal call to action to end poverty, protect the planet, and ensure that by 2030 all people enjoy peace and prosperity. There are 17 goals. The goals recognise that ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and working to preserve our oceans and forests.

A large, diversified investor whose holdings span much of the economy. Because the investor is exposed to the performance of the wider system, harm caused by one company may affect the value of other investments in its portfolio.

The process of reclaiming raw materials from waste products sent to landfill. This includes extracting rare metals from discarded waste electrical and electronic equipment (WEEE).

The risk of loss arising from the difference between the price of an instrument reported on a bank’s balance sheet – as determined by accounting rules – and the actual price a bank would obtain if it sold that instrument (if it is an asset) or the price a bank would pay to buy it or transfer it to a third party (in the case of a liability).

Investment in young, early-stage businesses with significant potential for growth.

Venture-capital investors may provide businesses with capital, expertise and networks while their products and business models are still developing.

A statistical measure of the dispersion of returns for a given investment. This is used by investors as a standard measurement of risk i.e. generally higher volatility is viewed as higher risk.

The rights attached to an investment that allow an investor to vote on certain company decisions. These may include the election of directors, executive pay, auditors, changes to a company’s constitution and shareholder proposals.

Most commonly computes the contribution of a company’s current activities towards climate change. The MSCI methodology we use states warming potential delivers an exact temperature value that signifies which warming scenario (e.g. business as usual (BAU) 3°C, 2°C, 1.5°C etc.) the company’s activities are currently aligned with.

Any electrical or electronic waste, whether whole or broken, destined for disposal.

WEEE includes household appliances (e.g., fridges and cookers), telecommunications equipment IT (e.g., computers, printers, and servers), electrical and electronic tools, toys and leisure equipment, and certain medical devices (e.g., dialysis machines).

Occurs when demand for water exceeds the available amount during a certain period or when poor quality restricts its use.

A return measure for an investment over a fixed period of time.