Martin McCourt doesn't often use the term impact investing. In fact, it's not really a part of his vocabulary. And yet, the former CEO of Dyson is drawn to it as an investor—great ideas that both have a positive impact and are profitable.
“The idea is to contribute to society in some way,” says McCourt, who over the course of his 40 years in British-based manufacturing, design and marketing worked for Dyson, Mars, Duracell, Toshiba and Pelikan. “It's lowering emissions, it's helping to drive down the carbon footprint, it's doing good stuff, but at the same time, it's commercial.”
Over the course of his 15 year tenure at Dyson, McCourt helped take the business from a single vacuum cleaner to a global company. When he left the “high risk, high reward” corporate world, he found himself drawn to investing in the “make it up as you go along” attitude that drew him to James Dyson in the first place. That search pushed him towards the forefront of education.
“I'm driven by education and particularly helping our youngsters to seize the opportunities that we need them to see,” he says. “I got involved in a couple of projects that were aiming to make a difference and I found that really gave me something over and above challenge and the potential to maybe earn a return... it was feeding my interest.”
A new criteria
McCourt pursued his new interest in impact by investing in two alternative energy projects and Lightfoot, a telematics company that uses advanced, real-time engine analytics to provide live, in-cab coaching for drivers. The telematics device helps reduce emissions and wear and tear on the vehicle while improving efficiency. “We like to think of it as a Fitbit, but for cars,” says McCourt.
He'd been following the business for months before investing and joined the tech company in 2018 as chairman. “I jointly invested with BGF when the business was looking to raise some scale-up capital,” he says. Like his other impact investments in alternative energy electric mobility projects, McCourt says he was attracted to the team's young, inventive nature and fertile imaginations. “It's one of those really, quite unique propositions, where it's great for the environment—which I love—it's great for the driver and for the owner of the vehicles.”
McCourt is a part of a growing trend of investors looking to new ESG (environmental, social and governance) metrics to define return—Is it good for the environment? Does it promote sustainability or social good?—without abandoning the importance of seeing value from an investment.
“There's no reason why an impact investment, something like Lightfoot, should fly just because it's doing good stuff,” he says. “It faces exactly the same challenges as other businesses do in establishing themselves, getting off the ground and gaining traction.”
Lightfoot, McCourt explains, has gone from in revenue but pre-profit when he met them to profitable. “I think there's a genuine thrust from us as angel investors to want to seek out and invest in progressive ideas that are going to make us feel good because they're making a positive contribution to the world, to the planet, to society,” he says. “But also that they have commercial capabilities to help those teams to do that."
Do good by doing good
As we face global existential challenges, McCourt says investors have a chance to play a role in solving these issues. Both Brexit and COVID-19 have highlighted the interconnectivity of people in very different ways.
In times like these, the media is full of stories of loss and confusion.“But there are also some positive byproducts that we can expect,” McCourt says. “Think about the thousands of people, professional people, losing their jobs—thousands of new businesses, new entrepreneurs are likely to pop up… the rate of registering small businesses goes up after something like this.”
It's those people that are building the businesses of the future. That's where the great ideas come from. “That's where we need to step in and help,” he says. “We need to seek these out and do everything we can.”
It starts with talking to founders, with educating yourself on the innovation going on (McCourt points to Innovate UK). “Ask them lots of questions about their attitudes towards the environment, towards where society – what are they going to do? What's that contribution going to be to the reduction of carbon footprint?” Learn about the angel investor syndicates focused on ESG investments. Look for impact investment funds.
“As investors, we haven't got enough capital to invest in them all—I haven't, so I have to be a little bit selective,” says McCourt. “So I go for [an idea] that really does make a difference because if it does, if it could, then it's going to be persuasive to others.”
Impact investing can transpire in a lot of different ways – mandates vary from business to business but in a way, McCourt sees it as his duty to translate his experience into resources for the next generation.
“If we've got the imagination here in the country, which I believe we have, and all that our youngsters need is a bit of support, a bit of gray-hair guidance and some capital,” says McCourt, “then we should all be pulling together on that because great things could happen.”