Interactive Brokers Pushes Regeneration, Sustainability With IMPACT Trading Platform

Over $500 billion went into funds focused on environmental, social, and corporate governance (ESG) issues worldwide through November, according to Refinitiv Lipper data.

Investors, who increasingly trust themselves and their embedded networks to enact change, are taking matters into their own hands, allocating capital to ESG issues they want to see resolved.

In catering to this growing trend of conscious capitalism, Interactive Brokers Group IBKR, a global brokerage firm, launched the IMPACT mobile trading application.

To learn more on how IBKR is enabling investors to easily align their portfolio and values, as well as help shape the future they wish to see, Benzinga spoke with the firm’s ESG Director William Peterffy and ESG Manager Edward Soffer.

Context: Petterfy and Soffer teamed up in 2019 to drive sustainability initiatives and culture at IBKR.

“As soon as I joined, Will and I put a plan in action of the vision that we feel ESG should be within the firm, for our products and services,” Soffer said. 

“Management was very much on board.”

At its core, IMPACT streamlines the sustainable investing process.

Investors select their personal investment criteria from 13 impact values and principles like Clean Air, Pure Water, Ocean Life, and Fair Labor & Thriving Communities. Users can exclude investments on certain categories, like high water usage, tobacco and more.

“Millennials are four times more likely to purchase a more expensive, eco-friendly product than a lesser expensive, mass-produced product,” Petterfy said of the IMPACT initiative being born out of an authentic belief that ESG is an issue to which people will commit capital. 

“I saw this beautiful opportunity to be able to bring an ability to invest in line with your values.”

With the duo expecting nearly $80 trillion to be transferred over to millennials in the next decade, IMPACT offers IBKR an opportunity to secure a share of the emerging retail ESG investing market.

“The whole pandemic accelerated the ESG process globally and so I think the time for IMPACT is now,” Soffer added.

Guidance, Clarity: “It’s very challenging to create portfolios,” Peterffy said in reference to the difficulties he experienced putting together funds that aligned with stakeholders’ interests in doing better.

“The feeling you get when you know that all of your money is out there creating returns for yourself, however, is beautiful.”

Adding, with users’ in-app selections, IBKR generates impact scores on existing portfolios and holdings, as well as provides the ability to review companies’ financial and impact metrics.

Based on the comparative impact scores of one company versus another, IMPACT users can even swap positions of the same dollar amount from one stock to another.

“The IMPACT ‘Swap’ function goes a step further than our competitors to allow clients to easily re-align their portfolio positions with what they care about the most, which we’re really proud of,” Soffer said.

IMPACT, Peterffy added, “allows you to educate yourself on subjects you care about, as well as meet people who share values with you and learn from each other.”

Going Forward: IBKR is planning app additions that better engage and impact.

“We’re super aware that this is such a new space and it’s going to continue to evolve,” Peterffy said. “The regulatory requirements are also going to shift and we’re committed to staying up to speed.”

Benzinga asked about IBKR’s perspective on sustainability with respect to crypto and its overall commitment to directly impacting the environment with reforestation initiatives, for instance.

“While bitcoin is extremely energy-intensive to mine, I don’t want that fact to take people away from the massive potential that crypto has to create a more regenerative and holistic economy,” Peterffy said. “We want to steer that crypto environment in the direction more towards regeneration and sustainability.

“Every investment is an impact investment.”

Photo by SplitShire from Pexels.