Helping people has always been important to us at Topcashback, which is why this year we decided to get into impact investing. We started the business back in 2005 and, despite offering a service which literally gives away money to anyone who uses us (yes, really!), it was a slow start. We struggled to attract people to the site and barely scraped together a living for the first two or three years.
Thankfully, however, our reputation as the highest paying cashback site slowly grew and we’re proud to say that we are now a sizeable company, employing over 200 people. In fact, we ‘give away’ (or save our members) over £100 million every year in the UK alone.
Perhaps due to our tough early years, and because our whole business is about saving people money, we became very savvy and prudent with our company’s money: we have aimed to always save a bit more each year. Having built up our savings, we wanted to earn a return, but more importantly do something good with it. The more we investigated impact investing, the more we have realised just how powerful it can be.
First steps into impact investing
We first heard the term impact investing back in 2018 and started investigating it in earnest after hearing talks at an event hosted by the crowdfunding platform Ethex in June 2019. There we met founder of New Money Rebecca Jones, as well as lots of other like minded companies and people.
Our first hurdle, if I think about it, was simply to overcome our own inertia. As a company, we default to making decisions which put our members’ interests first and balancing these against the long-term interests of our company, our staff and our suppliers. We have our ‘Fair Play’ ethos to guide these decisions. Dare I say it, but initially it felt pretty foolish to put our head above the parapet and say: “we should do things to help the environment as well.”
I’m not saying we didn’t ever try to raise money for charities, or create a positive impact, and we provide a service where our members can donate their cashback to registered charities, but these were not usually factors that took centre stage. However, everyone was positive about impact investing, and it clearly made sense to try to allow our money to do good, especially as we learned that investment returns needn’t suffer. This chimes with the heart of what fair play is, doing good by everyone involved.
Setting impact investment goals
Next, we had to actually start to do some work. We had the whole impact investing landscape to learn about. This meant not only learning about different investments, but also which investments were creating positive change. Even before that, we had to decide what sort of positive change we wanted to push.
This might sound easy, but in order to decide that we wanted to focus on environmental and clean energy issues, for instance, we also needed to decide what NOT to focus on. Handily, in 2015 the United Nations defined 17 Sustainable Development Goals (SDG’s) for the world.
“Deciding our focus and bringing key people in the company along with us was key”
So, with the help of Tribe Impact Capital, we created little pots of SDG’s, ranging from ‘most important’ (to us) down to ‘less important’ (to us). It was easy to choose those for the most important pile and much harder to put worthy causes in the ‘less important’ pile, but if we wanted any sort of focus, then this was necessary.
You may be thinking that a lot of navel gazing was going on, and that is certainly how it felt to us. But deciding our focus and bringing key people in the company along with us was a really necessary first step to get us moving. Decisions started to become easier and a little more traditional from that point.
Making impact investing happen
We chatted with several different investment management companies, making use of recommendations, and checked we liked their people and that their fees and charges were OK. In the end, we decided on a three-pronged approach.
EQ Investors is going to invest one pot of our funds. They invest in a range of impact funds through their Positive Portfolios and runs a very established and efficient operation. We’re also going to work with Tribe Impact Capital – who also invest in impact funds, but who will also invest directly in company shares and some other bespoke impact opportunities tuned to our specific requirements. Consequently, Tribe’s charges are slightly greater, but we think they will bring us another dimension.
“We’re proud to have been able to put a good deal of our money to ‘good’ use”
Finally, we’re also going to be investing directly in impact opportunities we find for ourselves. This may include investments into crowdfunding opportunities on platforms like Ethex, Energise Africa or Triodos Crowdfunding; or it might be impact funds or equities that we like the look of. To help us with our research, we will consult with Grierson Dickens Ltd. who are chartered financial planners that have expertise and interest in impact investments..
We haven’t got as far as investing everything into impact investments yet, but we’re proud to have been able to put a good deal of our money to ‘good’ use. In addition, we have also moved our cash ‘float’ – the pool of money from which we pay our members benefits – into a more ethical bank: Nationwide. Nationwide is a mutual and has a strong ethical side to its business. For instance, it avoids lending to fossil fuel extraction companies, which fits closely with our investment focus.
Sharing our impact investment story
Feeling proud that we’ve done the right thing is of course one benefit of taking the time to invest for impact, but there are others. It is a great story to talk to our staff about. We believe that many (or even most?) people like to feel that they’re contributing to something bigger than themselves: something good. And this is one cost-free way of achieving just that, with a little bit of effort. Furthermore, we hope that in time it can become a great story to tell our members. We would love to find a way of involving our members in our impact investing journey – which we hope could also help to educate a much wider audience on the benefits of impact investing.
“We believe people like to feel they’re contributing to something bigger than themselves”
So now we’re really keen to get into the numbers with the help of Tribe and EQ to establish just what has been achieved with our savings in terms of Co2 reduction and other positive impact measures. Early calculations indicate pretty huge benefits. It is almost embarrassing how much can be achieved for the small amount of effort and cost involved.
If any other businesses are tempted, we would absolutely encourage them to go for it: we’re happy to help if anyone wants a chat. From what we’ve learnt, we feel impact investing shouldn’t cost a fortune: either in fees and charges or investment returns. In fact, impact investing can bring many benefits.