The next stage in responsible investment
Impact investing is about funding solutions to help make the world a better place in a measurable way, while making an investment return from these solutions. The impact investment market is substantial and growing. According to the Global Impact Investing Network’s (GIIN) 2020 annual survey, the market for impact investing now stands at $715 billion.
We define impact investing as investing in companies that are growing because their products and services are delivering innovative solutions to society’s underserved needs.
“What impact investing does better than any other form of investing trying to solve the considerable issues facing the environment and society today is align that market-based incentivisation motive with the broader non-financial problems that need fixing.”
– Tim Crockford, Head of Regnan Equity Impact Solutions
Whatever asset class investors allocate to, whether it is public equities, like Regnan Global Equity Impact Solutions, debt or private equity, amongst others, impact investing is made with the explicit, ex-ante intention to generate a positive impact alongside a financial return. Companies or projects they invest in must have an underlying mission – to achieve a positive impact on society and the environment. Impact investors look for credible proof that these companies or projects are generating the positive impact that they claim, and that these positive impacts are not cancelled out by negative impacts, which may, for example, arise within their operations.
Investors identify positive impact solutions in many different ways, but we believe that one of the most comprehensive, evidence-based list of problems to be solved are the United Nations’ set of 17 Sustainable Development Goals (SDGs). They are a list of global ambitions designed to create prosperity for all, but in a way that protects the planet and its natural resources.
We also believe that impact investors need to be engaged investors, especially within public equities. Rather than solely relying on their portfolio companies, impact investors are accountable for delivering a positive impact themselves. They therefore need to take an active role in trying to influence company outcomes for the better.
The capital spectrum – from traditional investment to philanthropy
Source: Impact Management Project.