Stockholm (NordSIP) – Efforts to provide the investment industry with clear guidelines for impact investing continue with an updated set of principles released by the Impact Investing Institute, The Global Impact Investing Network (GIIN), and the UK-based Pensions for Purpose platform. The Impact Investing Principles are a means of encouraging the take-up of impact strategies while setting standards to help reduce instances of ‘impact washing.’
This set of principles is aimed at public and private pensions schemes and their various decision makers, stakeholders, and advisers. Asset management firms are encouraged to follow a dedicated set of nine operating principles for impact management hosted by the GIIN. With the latest update to the Impact Investment Principles, pension schemes are provided with four steps towards success.
The first recommendation is to select those impact priorities from the extensive range of environmental or social challenges that best align with the organisation or its members. These impact priorities should be integrated within the scheme’s official statement of investment principles. The second step involves the translation of these impact targets into a theory of change thesis that can help inform the appointment of external advisors and managers and support the integration of impact factors across asset classes. The third principle urges signatories to actively contribute to the attainment of the impact priorities by deploying capital, engaging with companies, and positively influence the wider market. The fourth principle sets the standards for measuring and reporting on impact investing.
The latest update builds on market developments from the past five years, including the broadening of the legal definition of fiduciary duty to include the consideration of social and environmental externalities. The organisations that collaborated on the update are behind efforts to establish better definitions and standards in the investment market, following initial instances of mislabelling of mainstream ESG fund products as ‘impact.’
According to the GIIN, the global impact investing market has exceeded $1.5 trillion worth of assets managed by some 4,000 organisations. This steady growth has taken place despite difficult market conditions and political headwinds in the sustainable investment industry.
Image courtesy of Nadir sYzYgY on Unsplash
Stockholm (NordSIP) – Efforts to provide the investment industry with clear guidelines for impact investing continue with an updated set of principles released by the Impact Investing Institute, The Global Impact Investing Network (GIIN), and the UK-based Pensions for Purpose platform. The Impact Investing Principles are a means of encouraging the take-up of impact strategies while setting standards to help reduce instances of ‘impact washing.’
This set of principles is aimed at public and private pensions schemes and their various decision makers, stakeholders, and advisers. Asset management firms are encouraged to follow a dedicated set of nine operating principles for impact management hosted by the GIIN. With the latest update to the Impact Investment Principles, pension schemes are provided with four steps towards success.
The first recommendation is to select those impact priorities from the extensive range of environmental or social challenges that best align with the organisation or its members. These impact priorities should be integrated within the scheme’s official statement of investment principles. The second step involves the translation of these impact targets into a theory of change thesis that can help inform the appointment of external advisors and managers and support the integration of impact factors across asset classes. The third principle urges signatories to actively contribute to the attainment of the impact priorities by deploying capital, engaging with companies, and positively influence the wider market. The fourth principle sets the standards for measuring and reporting on impact investing.
The latest update builds on market developments from the past five years, including the broadening of the legal definition of fiduciary duty to include the consideration of social and environmental externalities. The organisations that collaborated on the update are behind efforts to establish better definitions and standards in the investment market, following initial instances of mislabelling of mainstream ESG fund products as ‘impact.’
According to the GIIN, the global impact investing market has exceeded $1.5 trillion worth of assets managed by some 4,000 organisations. This steady growth has taken place despite difficult market conditions and political headwinds in the sustainable investment industry.
Image courtesy of Nadir sYzYgY on Unsplash
