As impact investors we aim to build a better economy. We invest in companies that ‘do good’ and support the transition towards an economy that serves people and planet. So, we hold a high standard on others. You may then wonder: what we do we do ourselves to embed impact and ensure its effective realisation?
This is how we, Pymwymic, commit to impact:
1. We are a certified B Corp
In 2006 a movement was born in the U.S. to redefine “success” in business. Nineteen pioneer companies were the first to receive B Corp certification: a trade mark indicating than an organisation uses business as a force for good. Only one year after B Corp moved from U.S. into Europe [i], Pymwymic became the first B Corp in the Netherlands. As of today, this global movement has grown to 2,576 organisations. Every year, we go through re-assessment to make sure our practice is still aligned with our values and explore how we can further improve.
2. Our governance structure is designed to safeguard impact
We act from the belief that impact investments should be used to maximise impact in combination with a healthy return on investment. In our opinion, the traditional venture capital governance structure, having partners as shareholders of the investment manager vehicle, does not fully safeguard this dual intent. So, we designed a different model. The Pymwymic Investment Management B.V. is owned by a non-profit foundation who oversees our work and decides about allocation of investment returns that normally fall to the investment partners (carried interest [ii]). Important fact is that the Investment Management B.V. (as an entity) does not receive any returns if we did not meet our impact targets. If there are proceeds, the foundation decides whether these will be allocated to investees, donated to our field building foundation, donor fund, or serve as additional compensation to the team.
3. We have Mission and Values Guardians
Pymwymic is a mission-driven organisation with strong values. [iii] Our actions are geared towards the impact we wish to realise: to touch 1 billion lives. We seek and select investors who share these values. To ensure our activities remain in line with our intentions, we have formally appointed three Mission and Values Guardians. These individuals are long-standing Pymwymic friends and members safeguard that we as an organisation remain to be a force for good. The Mission and Values Guardians oversee our work and have veto rights to prevent us from falling prone to mission drift and ensure we work with values aligned partners.
4. Our investment process is tailor-made to include impact
To secure impact throughout the core of our work – investing in impact companies – we have developed our own impact framework. Based on existing methodologies, we developed three tools, tailor-made to our own operations. These tools cover both screening for impact prior to investment as well as securing impact realisation during our investment period:
- A screening questionnaire which tackles topics such as: how committed is management to the mission, are financial and impact goals aligned, is there gender equality, is the company a B Corp, is the impact mission included in the Articles of Association?
- An in-depth evaluation tool of the impact model and impact risks of the target company. This tool discusses topics such as: are there unintended consequences that might be harmful? What is the probability of mission drift? Does the company target entire industry change or is the industry already heading in that direction? Is the money invested by Pymwymic in any way additional?
- Theory of change model [iv] which is used to (further) develop the impact approach of an target company. We support investee companies in determining the impact they aim to realise (e.g. safe drinking water for all) and translate this into concrete and measurable impact metrics (e.g. average % of materials sustainably sourced)
The above tools provide a way to translate qualitative matters into quantitative assessment. And yes, they are therefore prone to subjectivity. We consider our impact tools not as exact measures of the truth. Rather, we use them as a tool for discussion, a way to create common language and a systematic approach.
5. Our non-profit activities aim to catalyse the movement of impact investing
Similar to many other B Corps, we have a foundation that ‘serves the greater good’ through non-profit activities. Our foundation is called the Field Building Centre and its mission is to catalyse the movement of impact investing. We do this by supporting the transition of wealth holders in their journey from traditional to impact investing. Our decades long experience of creating awareness amongst wealth holders, inspiring action and investing in early to growth stage impact companies, can be catalytic to those around us. We believe in open sourcing our learning for the greater good. Therefore, we organise events to connect like-minded investors, share our learnings through trainings, publications and articles, inspire action through showcasing impact enterprises and offer Next Gens on their way into impact investing (see more about our Next gen offering here).
We like to lead by example. But we are far from perfect. What we can promise is that we will keep moving forward, even if we do not yet know what the best answer is, learning and improving as we go along. Maybe you find some inspiration in how we work.
Curious to know more about Pymwymic?
[i] The very first European B Corp was certified in September 2012.
[ii] Carried interest: share of the profits of an investment paid to the investment manager as a performance fee, rewarding the manager for enhancing (financial) performance of an investment.