Stephen Brenninkmeijer talks COP26, impact investing and faith

One of the key players in the inter-governmental dialogues ahead of COP26 is renowned impact investor Stephen Brenninkmeijer. He illuminates the background to the UN climate conference and his vision for impact investing.

“Impact investing is tough. I would advise any future impact investor you need to serve an apprenticeship first and learn what you are doing thoroughly, or you will lose a lot of money. I myself learnt a lot of lessons that way, and it is a hard way.” European Climate Foundation

CV

  • Chair, Supervisory Board of The European Climate Foundation, 2018-present
  • Member of the Board of Directors, World Resources Institute (USA), 2017-present
  • Several Advisory Board Member positions inlcuding at Auticon (Europe / UK), responsAbility Participations AG (Switzerland), Sutton Trust (UK), 2014-present
  • Founder and Principal, Willows Investments UK, 2007-present
  • C & A Senior management positions, 1983-2007

The Brenninkmeijers, a Dutch family of German descent, accumulated their fortune through the C&A retail clothing chain. Stephen Brenninkmeijer worked there until 2007 before devoting himself to impact investing.

“There are two sides to my impact work,” Brenninkmeijer tells Impact Investor, “social impact through Willows Investments and climate work through my Chairmanship of the European Climate Foundation. At the moment my climate work is more intense. The climate crisis is a priority.”

Brenninkmeijer became Chairman of the European Climate Foundation (ECF) in 2018. “It’s more than just a ‘brains trust’,” he says. “It seeks to create the right dialogue between governments and to encourage governments to move in the right direction. We have considerable independence thanks to our private funding. We can speak out.”

ECF is funded by a series of large foundations. Fifteen are listed on their website including the Children’s Investment Fund, and the Hewlett, Ikea, and Bloomberg foundations. Brenninkmeijer says ECF has played an important part in the run-up to COP26, working closely with the Biden administration and the team of US Special Presidential Envoy for Climate John Kerry in particular.

He is optimistic that COP26, which starts in Glasgow at the end of the month, will see rich countries make good on their commitment to providing the developing world with the $100bn (€86bn) needed to achieve their own climate goals. Around 80% of this has so far been pledged.

“Europe must include nuclear power in energy plans”

Having said that, Brenninkmeijer feels “Some countries still need to do more. China, obviously, but also India, Brazil, Mexico and Turkey.” At least, though, “China is starting to see the light.” Perhaps because “Covid showed them there was a sky over Beijing.”

Apart from its COP26 role, ECF works with some 600 strategic partnerships. Brenninkmeijer cites “important projects such as Greenpeace’s work in Turkey.”

Greenpeace has been putting significant pressure on the Turkish government to ratify the Paris Climate Change agreement. He also praises ECF’s work with Share Action and what was “achieved in pressurising major banks like Barclays to stop funding fossil fuel development.”

Share Action recently issued a highly critical report analysing the climate and biodiversity practices of Europe’s largest banks.

ECF’s relationships with European governments and with the European Commission are clearly key, something very much affected by the recent German elections. “We have high expectations of the new German government involving the Greens,” the ECF Chair says.

“We hope to persuade the new administration to move forward with the phasing out of coal-fired power stations from 2038 to 2028. After all, the UK is doing it in 2022.”

Brenninkmeijer feels Germany has gone wrong in eliminating the nuclear option too early. “As well as a focus on renewables, I believe Europe must include nuclear power in its future energy plans.” As he sees it, “nuclear technology has advanced hugely, and the costs of construction are considerably reduced.”

“I’m not a banker – I don’t make loans”

Willows Investments (WI) is the other side to Brenninkmeijer’s impact coin. It is an impact investment initiative launched in 2007 that “supports non-listed companies and funds that use market mechanisms to address the most pressing societal challenges.” WI mainly focuses on access to finance, education, healthcare solutions, and socially driven enterprises.

Brenninkmeijer says all WI investments are “equity investments. I’m not a banker – I don’t make loans.” He looks to have long-term relationships with his investments, which are selected through his personal network.

“My friends at Ananda Ventures come up with a lot of good ideas,” he says. Ananda Impact Ventures is the leading impact-focused venture capital fund with a pan-European investment remit, managing €150 million in four Core Impact Funds.

Auticon is one such idea that came from them. Auticon employs autistic adults who work in IT. It is one of the investments Brenninkmeijer is most proud of. “We have helped to create a leading IT consultant with some 260 consultants. They carry out detailed, specialist work very diligently.”

“People simply didn’t understand autism and there were shocking instances of bullying,” Brenninkmeijer says. Auticon employs business coaches, who work with individuals on a one-to-one basis, and with the people working around them. “We now have a large network of offices across Europe.”

Looking across his Willow Investments, Brenninkmeijer says “at the moment I am not making new investments until I have exited existing commitments.” At least one investment is close to ending: the Grassroots Business Fund. The fund supports sustainable businesses run by people in Africa, Asia, and Latin America.

A question of faith

“Philanthropy is in my roots,” Brenninkmeijer notes. “My family has decades of involvement. But long ago I personally came to realise just giving money was not enough for me. I wanted to be a ‘venture philanthropist.’”

Brenninkmeijer’s Catholicism is relevant here. “Faith is an important part of my personal motivation and I work closely with many faith groups. We have helped to persuade the Catholic Church in the UK to become decarbonised by 2030.”

The future of impact investing

Brenninkmeijer believes “the future of impact investing is inextricably linked with the climate crisis.” As such, in future, it “will be very much about technology plays.” For example, he sees green hydrogen as “central to where investment capital is going in the next decade.”

Brenninkmeijer welcomes the way the climate issue is helping to take impact investing to a wider audience, away from being “an exclusive club. It is vital that we get more people involved and tap into the huge upswell in demand.”

His investment with responsibility, the asset management firm in Zurich, is a good example of this. They have created funds that allow investors to put in as little as CHF500 (€466), without long lockups. Apparently, an investor can withdraw funds after just three months.

But despite these exciting opportunities, this frontrunner of the impact world cautions: “Impact investing is tough. I would advise any future impact investor you need to serve an apprenticeship first and learn what you are doing thoroughly, or you will lose a lot of money. I myself learnt a lot of lessons that way, and it is a hard way.”