Impact investing

This involves investing with the primary goal of achieving specific, positive social and/or environmental benefits while also delivering a financial return. Impact investing creates a direct link between portfolio investments and their socially beneficial activities; historically most such activity has occurred in unlisted assets.

Our approach extends beyond dedicated impact investment strategies. We believe investors can contribute to better real-world outcomes through:

• Investment in solutions - allocating capital to organisations that provide solutions to social and environmental challenges
• Supporting transition - allocating capital to organisations assessed as capable of, and potentially willing to, move towards more sustainable practices, and using stewardship to encourage credible progress
• Stewardship - using investor influence to encourage better outcomes from fund managers and across their underlying investments
• Systemic stewardship - engaging with policymakers, regulators and other stakeholders to address systemic risks that affect the performance of the economy as a whole and can undermine the stability of financial markets.

Impact investing can be relevant to a wide range of asset owners, from defined benefit pension schemes to endowments. The appropriate approach depends on each investor’s objectives, obligations, risk appetite, liquidity needs and investment time horizon.

Yes. Impact investing does not necessarily mean accepting lower financial returns: some strategies target market-rate, risk-adjusted returns alongside positive social or environmental outcomes. Others deliberately target lower returns to pursue particular impact objectives.

Our research team seeks to identify investable impact strategies across a range of asset classes that target market-rate returns. We assess their financial characteristics alongside their impact approach.