in ESG-integrated assets at Gresham House
"With the Green Economy Mark, people can see that a Gresham House product is associated with positive principles of sustainability."
Few companies in the green economy can trace their history back as far as Gresham House, which was founded in 1857. But while sustainability considerations were unlikely to have troubled its founders, the company has embraced sustainable finance following a management buy-out in 2014.
Since then, the firm, which manages around £3.2bn in assets, has embedded environmental, social and governance (ESG) considerations across its existing public and private equity funds and its real asset investment vehicles. It has also launched three clean energy funds – two renewable energy VCTs and a third that invests in energy storage technologies.
The two VCTS, which collectively manage circa £60m, operate 195MW of wind farms and solar parks across the UK. The Gresham House Energy Storage Fund plc, meanwhile, invests in the large-scale energy storage systems that will be needed to integrate growing volumes of intermittent renewable energy generation into the UK grid. Gresham House raised £100m into the fund at its IPO on the Main Market in December 2018 and has since raised an additional £107m through a series of placements.
These three funds received the Green Economy Mark at its launch in 2019. This year, the company also received for the Mark at the corporate level.
Making a corporate mark
The company qualifies for the Mark because the majority of its revenue now derives from sustainable funds, including forestry investments alongside wind farms and solar parks.
“With the Green Economy Mark, people can see that a Gresham House product is associated with positive principles of sustainability,” says CEO Tony Dalwood.
“We are committed to operating responsibly and sustainably, taking the long-view in delivering sustainable investment solutions,” he adds. “Our ambition is to be one of the leaders in ESG and sustainable investing.”
The approach is paying dividends. In March 2020, the company – which is listed on London Stock Exchange’s Alternative Investment Market – was able to raise £8 million to strengthen its balance sheet, despite turbulent market conditions.
ESG at the investment core
Investors increasingly recognise and reward asset managers who integrate ESG considerations throughout their investments, as is evidenced by the growing number of institutions that are signatories to the Principles for Responsible Investment and by the flood of money flowing into sustainable investment products.
This marks a sea-change since Dalwood took the helm at Gresham House six years ago, he says. “Then, ESG was relatively niche; today it’s at the investment core for all our clients. Investors assumed there had to be a trade-off between financial and non-financial returns. No longer.”