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Where next for Sustainable and Impact Investing?

Impact Investing: Evolution or Revolution?

Impact investing is an emerging branch of the wider ESG/sustainable investing theme that has recently been gathering momentum across the asset management industry. Unlike sustainable investing, whose roots arguably stretch back over 200 years, impact investing can be viewed as being in its relative infancy. The Rockefeller Foundation first used the term 'impact investing' in 2007 to describe investments made to generate both a financial return AND a positive social or environmental impact.

Investors are not only demanding that money is invested responsibly, but that the positive impact of such investment is both deliverable and more importantly, quantifiable. As a result, asset managers are now adopting the dual mandate of 'impact investing' in rapidly increasing numbers. This collection of papers discusses the topic of sustainable investing while also investigating the increasing interest in ‘impact investing’ as a rapidly growing niche within the broader subject area.

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Why the market gets sustainable investing wrong (Wellington, 2019)

In this paper, Wellington seeks to inform investors about the ‘sustainable investing ecosystem’ which breaks sustainable investing into several subcategories, then highlights several ways in which an ESG approach can generate alpha for investors due to several market inefficiencies in this market segment.

Quantifying impact: measuring and managing effects on people and the planet (Nuveen, 2019)

Nuveen's paper explores the differentiation between more traditional responsible investing approaches that usually adopt environmental, social and governance (ESG) principles and 'impact investing' which seeks specific and quantifiable social and ecological benefits in addition to market returns.

The Impact of ESG Investing in Emerging Market Equities (Candriam, 2019)

For compliance reasons, this paper is only accessible in certain geographies

Candriam examines whether ESG and sustainable investing adds to, or detracts from, financial returns in EM equities.

Sizing the Impact Investing Market (GIIN, 2019)

GIIN's whitepaper offers an insight into the scale, reach and diversity of the impact investing market. They estimate the impact investing market to be more than $500bn, as at the end of 2018. This figure compares with an estimate of $30.7trn (US SIF, 2019), invested under the broader 'sustainable' label. They go on to note that just a few organisations account for a quarter of all impact investment assets, but that half of 'impact managers' manage less than $29m.

Impact Investing - Made Simple Guide (Hermes IM, 2018)

Hermes explores the key elements of impact investing as an investment approach, examining several ESG strategies and illustrating the differences between them.

Impact Investing & the Global Microfinance Sector (DWS AM, 2018)

For compliance reasons, this paper is only accessible in the United Kingdom

DWS examines the global microfinance sector, one of impact investing's most commonly targeted social impact themes.

Impact Investing and Social Infrastructure (Franklin Templeton, Jun 2018)

For compliance reasons, this paper is only accessible in the EMEA region

In this paper, Franklin Templeton explores how impact investing in social infrastructure in Europe can offer positive outcomes for both communities and the environment.

Investment stewardship for positive societal impact (Eaton Vance, Jan 2018)

For compliance reasons, this paper is only accessible in the United States and Canada

The third in a series of Calvert-Serafim papers suggests that large investors should act as ‘stewards of the commons’ by assisting in the building and sustaining of industry and system-level collaborations for ESG issues. Companies which devote resources to ESG issues may be at a short term disadvantage to those that do not; an industry-wide collaboration may mitigate some of that disadvantage.

Five Building Blocks For Impact Management (Franklin Templeton, 2019)

For compliance reasons, this paper is only accessible in the EMEA region

Franklin Templeton investigates the rapidly growing area of impact investing; a branch of ESG investing that aims to generate 'positive, measurable social and environmental outcomes alongside a financial return'. This report offers an overview of the different approaches and tools used in impact investing.

Sustainable investing in a time of climate change (Manulife IM, Jun 2019)

For compliance reasons, this paper is only accessible in certain geographies

Manulife examines the scientific reality of climate risks and explores how asset owners and asset managers can build partnerships with investee companies, based on shared interests.

An investor's guide to sustainable investing (UBS AM, 2019)

In this handbook, UBS collates a selection of essays which provides a comprehensive overview of sustainable investing. Papers suggest ways in which ESG may affect equity and fixed income valuations, discuss several strategies for implementation and offer insights into what sustainable investing looks like from a Dutch perspective.

Evolution of Sustainable Investing and the case for integration (Vontobel AM, 2018)

Vontobel notes the growing global trend toward sustainable investing but chooses to focus mainly on the Nordic approach which has been at the forefront of ESG adoption and thinking. They demonstrate how active management ESG can be integrated to deliver alpha.

Fact checking nine common ideas about sustainability investing (Robeco, 2018)

Robeco explores several popular misconceptions about sustainability investing, while also seeking to inspire investors with new insights into this rapidly growing area of investment.

Sustainability: The future of investing (BlackRock, 2019)

For compliance reasons, this paper is only accessible in certain geographies

Blackrock discusses three significant themes that are driving rapid transformation in sustainable investing and makes a strong case for suggesting that the future of investing is sustainable.

Sustainability and recycling: investing for a circular economy (Hermes IM, 2018)

For compliance reasons, this paper is NOT accessible in the United States

Hermes examines the need for a complete reappraisal of how we produce and consume goods, arguing for the adoption of a circular, rather than linear, economy, which would focus on sustainability from the outset. Investors need to play their role too, engaging with companies to promote and improve resource efficiency, waste reduction and high levels of recycling.

The Big Book of SI (Robeco, 2018)

In Robeco's epic, 102-page, "Big Book of Sustainable Investing", the authors take an in-depth dive into sustainability investing and the megatrends that are driving it.