Unsystematic and systematic risk

Diversification is one of the main talking points in conversations around investment advice. Ever since markets have become more accessible, there has been a strong emphasis on the importance of having a diversified portfolio, but what is diversification, and how can it really be achieved?

Everyone knows that risk is an inevitable part of investing, after all, there are no free lunches. Typically, when choosing investments we're exposed to two types of risk: unsystematic (also called idiosyncratic) and systematic. The first is firm-specific risk, it can be the risk associated with unfavourable litigation, a natural catastrophe that impacts a company's headquarters, and so on. The second is market risk, and it relates to the degree to which an investment moves with the overall market.

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Building a diverse portfolio

This is the part where diversification comes into play. In essence, diversifying a portfolio means spreading investments across several different assets to help manage both types of risk (though, as we'll see, it doesn't do so equally).

By holding a portfolio of, say, thousands of stocks, each with a relatively low weight, you reduce the impact of any single company-specific event. If one holding suffers a bad outcome, it's unlikely to have a meaningful effect on the performance of your overall portfolio. This is diversification doing what it does best: eliminating unsystematic risk almost entirely.

With systematic risk, things are not as linear. This is the risk inherent to being exposed to the market itself, it’s driven by broad forces like interest rates, inflation, or recessions that touch nearly every asset to some degree. You can combine asset classes that have historically had low or negative correlation (i.e. whose returns haven't historically moved in the same direction and to the same degree) to smooth out the overall volatility of your portfolio. However, this won’t entirely erase systematic risk as historical correlations are not a fixed law.

Stocks and bonds are the clearest recent example. Historically, both these asset classes had an inverse relationship, with the long-term return correlation between equities and bonds having been broadly negative since the 1990s. However, that changed in 2022, with that year representing the first time that both equities and bonds had experienced negative returns in the same year since 1977. While some data shows this inverse relationship partially resuming in 2023, this is still a reminder that historical correlations between asset classes aren't a fixed law and can shift with the macro environment.

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Common diversification mistakes to avoid

While diversification is a crucial strategy for managing investment risk, investors should watch out for a few common pitfalls:

1. Over-diversifying. Spreading money across too many funds with overlapping holdings doesn't add much protection (it might just increase investment cost and complexity, without meaningfully reducing risk any further).

2. Mistaking "different" for "uncorrelated."  Real diversification means choosing assets that don’t move in the same direction at the same time. For example, buying gold, silver, and platinum might look like variety, but because these metals often behave similarly, they don’t provide the kind of diversification investors usually aim for.

3. Skipping rebalancing. Portfolios drift as some holdings grow faster than others. Without periodically rebalancing back to target weights, a portfolio can end up far more concentrated and far riskier than originally intended.

Also don't forget that you can diversify by spreading your investments across various industries (like technology, health care, energy, and financials), across several geographical regions, market capitalizations, investment styles, and so forth.

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Bottom line

Diversification is a core approach to managing investment risk and supporting long‑term growth. While it doesn’t guarantee profits or eliminate losses, building a well‑diversified portfolio can help reduce the impact of market ups and downs and lead to more stable returns over time.

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https://www.vanguard.co.uk/professional/vanguard-365/investment-knowledge/portfolio-construction/understanding-stock-bond-correlations

https://investor.vanguard.com/investor-resources-education/portfolio-management/diversifying-your-portfolio

https://www.personalinvesting.jpmorgan.com/guides/investing-principles/diversification?referrer=https%3A%2F%2Fwww.ecosia.org%2F

https://www.justetf.com/en/academy/diversification-protects-your-portfolio.html

https://www.fca.org.uk/investsmart/diversification

https://www.blackrock.com/americas-offshore/en/education/portfolio-construction/diversifying-investments

https://www.fidelity.com/viewpoints/investing-ideas/guide-to-diversification

Hello,

A new project is coming to Goparity - and it is one with a story worth telling. Banbu is a Spanish brand built on a simple but serious conviction: the products people use every day should not work against them.

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🌿 Where it started

Banbu's co-founder Verónica was 18 when she was diagnosed with polycystic ovary syndrome and had to undergo emergency gynaecological surgery. What followed was years of research into hormonal health - and a discovery that changed the direction of her life.

The products she had been using daily, shampoos, deodorants, moisturisers, contained endocrine disruptors: substances capable of interfering with the body's hormonal system. They were legal, widely sold, and almost entirely invisible to consumers. She could not find products she fully trusted. So she built them.

Banbu was born from that decision. Every formula is vegan, water-free, and free from endocrine disruptors. Every product ships without single-use plastics. It is a mission with a product line - and a growing community of people who have decided they deserve better.

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🫧 What Banbu makes

Banbu's catalogue covers more than 130 products across hair, body, face, dental care, and perfumery. All are made locally in Spain, with biodegradable or compostable packaging. Manufacturing is outsourced to a Spanish producer, but Banbu retains full intellectual property over all its formulas, registered in the CPNP.

The brand operates through a hybrid model: a direct online store, three physical shops in Bilbao, Barcelona, and San Sebastián, and a B2B network of more than 300 multi-brand retailers and international distributors across Spain, Portugal, Italy, the Netherlands, and Germany.

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📊 What the funds will be used for

The funds raised through this campaign will partially finance Banbu's strategic growth plan for 2026 to 2028. The plan focuses on three areas:

• 💰 Inventory to support the expected increase in sales
• 📣 Marketing and customer acquisition, including digital advertising, e-commerce optimisation, and educational content on hormonal health
• 🔬 Research and development, covering new anhydrous formulas and proprietary traceability and impact software

The goal is to accelerate customer acquisition, improve retention, expand into new sales channels, and consolidate operational profitability by 2027.

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🌱 The impact Banbu creates

Every product Banbu sells removes an endocrine-disrupting alternative from a consumer's routine. At scale, that adds up.

By 2026, Banbu's operations are projected to deliver:

• ♻️ 334 tonnes of CO₂ avoided‍
• 💧 442,300 litres of fresh water saved‍
• 📦 653,744 packaging units avoided

Banbu only uses reusable materials for packaging - aluminium, paper, and glass. 100% of the paper used is recyclable, sourced from PEFC and FSC certified producers. 20% of products are available with refill systems, reducing packaging waste further. And by producing solid cosmetics instead of water-heavy liquid alternatives, the brand significantly reduces water consumption at the point of manufacture.

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👥 The team

Banbu was co-founded by Verónica Diez, CMO, who brings over eight years of experience in e-commerce and digital marketing, and Rodrigo Folgueira, CEO, who has a background in aeronautical engineering and over a decade of experience in sales and team management. The company's CFO, Sara Amor, has eight years of experience in administration and finance across multiple sectors.

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Investments made through the Goparity platform carry risk, including the risk of partial or total loss of capital. Loan repayments are made by the promoter through the platform. Past performance does not guarantee future results.

Dear community,

You probably don’t know this about me, but one of my first post-university jobs was at the European Parliament. After a short experience in certification and inspection when I graduated, I was lucky enough to meet someone (surfing, because that’s how life goes) who offered me an unpaid internship in the European Parliament in Brussels. I knew nothing about politics, but it was a technical assistance role abroad, so I took it.

When I was about to finish that internship, nearly broke and unemployed, presidential elections took place in Portugal. The new president hired staff from the European Parliament, and I was invited to stay.

In the European Parliament, I followed the Environment, Research & Industry and Energy commissions. For two more years I lived inside the European project, had colleagues from more than 25 different countries, and learned from important politicians, scientists, debates, NGOs and industry representatives. I supported decision making in several important policies, including the “20-20-20” package, a flagship initiative that reinforced Europe’s political leadership in renewables and climate.

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This picture I saw recently in a LinkedIn post reminded me of those days in the mid-2000s. Every piece of energy policy discussed included words like “secure”, “competitive” and “energy independence” alongside others like “clean”, “decentralised” and “affordable”. This green paper is where it all started (for me, of course).

As much as critiques contested and lobbyists rallied against it, the European Commission always had it very clear: yes, it is possible, and we should push for the best of two worlds (actually three): energy can be clean, secure and affordable.

20 years later, renewables, especially solar and wind, keep steadily “shocking” the energy markets with low electricity production costs all over the world and solar achieved grid-parity almost all over Europe during the 2010s.

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At Goparity, our community has been part of this shift. Nearly half of all projects on our platform fall under the Sustainable Energy category, representing over 20,7 million euros lent.

Together, we estimate that all the projects we funded generate 36.4GWh per year. Considering only the 150 settled loans we actually measured, their confirmed real-world impact already is 6,7 GWh generated or saved, and 14.000 tonnes of CO₂ avoided per year (equivalent to planting more than 600.000 trees).

These are numbers we could only have dreamed of seeing from citizen-led finance back in Brussels, those days.

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Highlights of the quarter

🌱 Stronger impact methodology: we worked with the UNDP Alternative Finance Lab to improve our impact framework, refining categories, aligning with the SDGs, and strengthening how we measure and communicate impact.

‍👥 Bring a friend (or more): we launched a renewed referral programme. Share your link, and if your friend invests 20€, you both get 20€ more to invest. Like the 20-20-20 policy back in Brussels.

‍🤝 Equity investing: following the acquisition of Bolsa Social, we launched our first equity campaigns in Spain under the "Bolsa Social by Goparity" brand. The next one will be live on Goparity directly.

‍♀️FemTech Portugal partnership: we signed a partnership with FemTech Portugal to open the underfunded women's health innovation projects to our community, reflecting a longer-term commitment to gender equity in finance, which I first wrote about in 2023.

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🇲🇾 First project in Southeast Asia, with a first-loss guarantee: two milestones in one campaign.

Aquila is Goparity's first project in Malaysia, financing 58 rooftop solar systems for Malaysian households, generating 696 MWh of clean energy per year and avoiding 538 tonnes of CO₂ annually. Aquila helps small and medium-sized businesses across Southeast Asia access clean energy funding, and this campaign specifically enables Malaysian families to install rooftop solar with no upfront cost.

For the first time, a Goparity campaign comes with a first-loss guarantee. Energy4Impact, powered by Mercy Corps, has activated a 60,000€ first-loss guarantee, meaning that in the event of any capital loss, 20% of your loan amount is covered, on top of Aquila's existing security package.

A first-loss guarantee has been one of the most requested features by our community. Structures like this help unlock private capital for communities where financing is the main barrier to clean energy adoption. This is exactly the kind of problem we want to tackle.

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Impact Report 2025

One question has always been at the heart of what we do: does this actually work? Not in the abstract, in real, measurable terms. Our Impact Reports are our most honest attempt to answer that and I'm proud to say the 2025 edition is now live.

This year, we set out to make the link between capital and impact more explicit: how much does each euro you invest actually change? We gathered data across all funded projects, linked it to measurable indicators, and translated it into concrete, comparable numbers. The result is a report that reflects not just what we've built, but what your investment contributes to.

I hope it brings to life what your money is really building.

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News from our projects

🌊 Sea4Pain's clinical trial application for their analgesic program has been approved. This is a major scientific milestone for Sea4Us.

🌿 Valcon Medical has strengthened its EU-GMP manufacturing capabilities and established a partnership with a major European pharmaceutical company. It has also already created 3 of the 10 jobs it committed to when taking out the loan.

🫔 Artisan Tropic's new food-grade processing facility and integrated production equipment are on track to be completed by the end of 2026 or early 2027.

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🏗 Vila Sustainable School: full recovery achieved.

I've written about credit recovery many times in these newsletters, and I'll keep doing so because transparency on this is non-negotiable. This one is worth celebrating.

After the first three loans (I, II, III) to Vila Sustainable School entered default during the first quarter of 2025, our team initiated formal recovery proceedings to enforce the property collateral that backed them.

On the 27th April, the sale of the property was completed, and on the 6th of May the full capital and interest have been transferred to investors' wallets.

This is one of the most important recovery outcomes in Goparity's history and it reflects a few things I frequently talk about:

1. The importance of real collateral backing secured projects;
2. The value of diligent, persistent legal work;
3. The importance of patience: recovery and negotiation take time, involve third-parties and very often courts which work at their own pace.  

And there is an important positive note for impact, too: the school will continue to operate, only the building changed owner.

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Coming up

🎨  Brand Update: You'll soon notice that Goparity sounds and looks a little different. Not a rebrand, an evolution. And you won't find a single AI-generated image in it. The projects our community funded over the years tell the story better than anything a machine could generate.

‍🖥️ New website:🎨 A new website is on its way too. We've built it to reflect how far the platform has come and to make room for what's coming next: a broader range of sustainable investment options, all in one place.

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🤝 First equity campaign: The Goparity community will be able to invest in equity directly on Goparity. A milestone we have been working towards for a long time, and one that opens a new chapter in what impact investing can mean on this platform.

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📺 We were on TV

We were featured in an episode of Inteligência Portuguesa on 11 May. You can catch the episode, which is in Portuguese:

• Live on 17 May 2026 in RTP Mundo Ásia
• Live on 24 May 2026 in RTP Mundo
• At any time, if you are located in Portugal, on RTP Play here ->>

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🙋‍♂️ The question

Part of what makes Goparity different is who we grow with! And that includes the companies we can now support all the way through their journey, from early-stage ambition to scaled impact.

So I want to ask you: which brand or company would you love to see on Goparity?

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🎵 Music note: Lately I’ve been listening to “She’s a rainbow” by the Rolling Stones a lot. A song that could be about a girl or love, but also about spring and bringing color to an otherwise grey world. Spring always feels like an opportunity, or the setup for something good or big. That’s what it feels like at Goparity nowadays.

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If you believe in what we’re building at Goparity, please share your experience here. Your feedback not only helps us improve, but also helps more people discover impact investing.

We are excited to share that the Aquila campaign marks a significant milestone for Goparity: our very first project in Southeast Asia.

This is not just a new campaign. It is the beginning of our impact journey in one of the most promising and fastest-growing clean-energy regions in the world.

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🌏 Why Southeast Asia, why now?

Southeast Asia is one of the world's most dynamic regions: young, fast-growing, and rapidly scaling climate-tech solutions. Renewable energy adoption is accelerating, and the need for innovative financing mechanisms to support that transition is real and urgent.

The numbers speak for themselves. The region is home to over 675 million people, and energy demand is growing faster here than almost anywhere else on the planet. At the same time, millions of households still cannot access affordable, reliable power - let alone clean energy. The gap between ambition and access remains wide.

Many households across the region cannot access the upfront capital needed to install solar, even when the long-term savings are clear. This is not a technology problem. It is a financing problem. And it is exactly the kind of problem that impact investing is well placed to solve.

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☀️ What is Aquila doing about it?

The campaign finances the expansion of Okapi, a Malaysian company helping families install rooftop solar panels with zero upfront cost. For many of these households, the barrier to clean energy has never been a lack of interest - it has been access to financing. Okapi removes that barrier entirely, partnering with trusted local installers who manage installation, operation, and ongoing maintenance. Families switch to clean, affordable power immediately, with no initial outlay required.

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The campaign finances 58 new residential solar systems and contributes directly to:

• 🌿 538 tonnes of CO₂ avoided per year‍
• ⚡ 696 MWh of clean energy generated annually‍
• 💡 Reduced electricity costs for Malaysian families
• 🌱 Expanded access to reliable, affordable solar power in a region where the need is growing fast

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🌱 A region at a turning point

Southeast Asia is not a single story. It is a collection of fast-moving economies at different stages of their energy transitions - and that is precisely what makes it so significant.

Countries like Malaysia, Indonesia, Vietnam, and the Philippines are setting increasingly ambitious renewable energy targets. Private capital is beginning to follow. But the financing infrastructure to connect that capital to the households and communities that need it most is still being built.

Aquila Climate Capital, the promoter behind this campaign, is headquartered in Singapore and operates across the region. Their track record includes USD 22 million deployed across 20 renewable-energy projects in 5 Southeast Asian countries. They are not newcomers to this market - they have spent years building the relationships, the due diligence processes, and the local expertise needed to make projects like this work.

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🛡️ De-risking emerging market investment

Investing in a new geography always raises questions. That is fair and reasonable. One of the reasons we were drawn to this campaign is the quality of the protection structure around it.

Energy 4 Impact powered by Mercy Corps, a globally respected organisation accelerating clean-energy access in emerging markets, activated a €60,000 first-loss guarantee backing this campaign - equivalent to 20% of the total investment. In the event of any capital loss, that 20% is covered from the outset, before any other safeguards come into play.

This kind of blended-finance mechanism matters beyond the protection it offers individual investors. It is real-world evidence of how targeted guarantees can mobilise private capital for clean energy in markets where financing is scarce. When organisations like Energy 4 Impact put their own resources behind a project, it signals something meaningful about the quality and credibility of what is being built.

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A first step, not a last

For Goparity, Aquila is the beginning of something bigger. Southeast Asia represents a region where the combination of energy need, economic growth, and climate ambition creates genuine conditions for impact at scale. We have spent time understanding this market, building relationships with credible local partners, and identifying the kinds of projects where private investment can make a real difference.

This is our first project here. It will not be our last.

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Investments made through the Goparity platform carry risk, including the risk of partial or total loss of capital. Loan repayments are made by the promoter through the platform. Past performance does not guarantee future results. The first-loss guarantee covers 20% of the total campaign value and is subject to the terms agreed with Energy 4 Impact powered by Mercy Corps.

A Theory of Change describes and illustrates how and why a desired change is expected to happen in a given context, providing a roadmap for the financial and non-financial interventions required to bring it about.

Goparity’s theory of change describes how a community-based impact finance platform can redirect financial flows, so that more impact-driven organizations can emerge and grow, while a greater share of society actively participates in transforming the economy.

The problem

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The current economic system is increasingly detached from real-world needs and the promotion of the common good, failing to internalize the social and environmental impacts and long-term costs of economic activity. At Goparity, we believe that the system that has caused this damage can and should be part of the solution.
Several structural drivers reinforce this dynamic: less than 1% of global financial assets are directed to sustainability and development; traditional banking continues to finance harmful industries; and individuals and organizations largely lack visibility on how their money fuels negative impacts.
This results in unequal and insufficient funding for sustainability and development, accelerating environmental degradation and eroding social well-being, while financial and impact literacy remain low among people and organizations. The consequences include a persistent 4 trillion USD global sustainability funding gap, continued environmental damage and weakening social cohesion, and limited awareness of financial alternatives that would allow people and organizations to align their choices with their values.  
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The solution

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Goparity connects organizations to dedicated sustainability funding while empowering individuals to align their financial decisions with their world views and values. By catalyzing this connection, we raise awareness and strengthen financial and impact literacy among both people and organizations.
Through this approach, Goparity works towards a vision of an impact economy in which financial flows systematically support organizations with an impact purpose and where people and assets are consistently directed towards addressing social and environmental challenges. In this vision, agrifood systems, the blue and green economy, the social economy, and the energy system are all transformed so that production is sustainable, communities are resilient and inclusive, and energy is clean, affordable, and efficient.
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The outcomes for key actors

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For investee organizations, access to funding reduces their financing gap, enabling them to sustain and scale their operations while delivering solutions to social and environmental challenges. Impact assessment and advisory support deepen their impact literacy and strengthen their capacity to understand, manage, and enhance their social and environmental performance.
For investors, the platform increases the proportion of their finances allocated to impact, supports the growth of their savings or investable resources, and improves their financial and sustainability literacy. This contributes to greater financial autonomy and a stronger sense of impact agency.
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Systemic and thematic impacts

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Through the projects it finances, Goparity applies this Theory of Change across several thematic areas, contributing indirectly to systemic transformation in agrifood systems, the blue and green economy, the social economy, and sustainable energy.

• Sustainable energy: Contributing to the expansion of sustainable energy infrastructure, increasing clean energy production, and avoiding CO₂ emissions.

• Green economy: Supporting job creation, reducing energy intensity, increasing recycling rates and water-use efficiency, and expanding areas that are protected, certified, or under Indigenous-led protection.

• Agrifood systems: Increasing the share of land under sustainable agricultural practices, reducing food loss and waste, and improving the productivity and incomes of small-scale food producers.

• Blue economy: Contributing to the expansion of marine areas that are protected or under Indigenous management, increasing the share of sustainable fisheries, and reducing food loss and waste across blue value chains.

• Social economy: Beyond job creation, enhancing access to essential community services for the population, such as health, education, culture, and other foundational services that strengthen social cohesion.

Does it surprise you to learn that banking and investing activities are not climate-neutral? When we connect these topics, we are talking about applying a climate lens to financial management.

The money existing in any bank serves a purpose – banks will lend and invest across the economy. Banking institutions have a power to direct money and influence outcomes, and the activities they choose to finance, matter.  

In the Paris Agreement, nations of the world collectively agreed on limiting global warming levels to 1.5º above pre-industrial levels, intending to reduce greenhouse gases emissions and act against climate change and its harsh consequences on people and the environment. However, reports have found that since 2016, when the Agreement was adopted, the world’s biggest banks not only have continued financing industries with high levels of emissions, but they have increased funding fossil fuel expansion – meaning new extraction projects. These reports vary from $5.5 trillion to $7.6 trillion committed to fossil fuel financing in that period.  

By consequence, your money and your savings in the bank, however big or small, are most likely being used to fund fossil fuel activities and even expand them. The issue feels bigger when individuals and companies are unaware of alternatives to align their finances to their values and to contribute to positive impact. The good news is that most people want to act based on their values using their money: a comprehensive study found that 69% of the global population would be willing to contribute 1% of their personal income towards climate action.

Goparity intends to fill the alternative gap with a community-based solution, giving people and organisations back the choice on what is financed with their money. By redirecting capital from high-emitting industries, Goparity acts as a connector among investors and impactful organisations that work towards real-world solutions in sustainable energy, the blue and green economy, agrifood systems and a social economy.