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Sustainable investing’s new challenge – avoiding ‘impact-washing’

US impact investor explains its approach to establishing SDG metrics Environmental, social and governance (ESG) investors must become aware of the risk of ‘impact washing’ as more fund firms target the UN Sustainable Development Goals (SDGs) in their investment approach. The challenge has led US impact investor American Century Investments to construct its own metrics

Companies Should Measure ESG Impact Along With Financials. Here’s How

The recent climate protests across the world have showed that concerns about global warming are no longer confined to experts, but shared widely by people of all ages and persuasions. In part, that’s because climate change has been highly measurable for a number of years. Worrisome trends evident in indexes of emissions and greenhouse gases arguably are as important

Fossil Fuel Subsidies And Impact Greenwashing Are Stalling The Energy Transition

Since 1800, worldwide consumption of fossil fuels has increased 1,300-fold. Access to this cheap energy has lifted people out of poverty and catalyzed economic growth, wealth creation and healthier living environments. So, the fossil fuel industry must be remarkably profitable, right? After all, if renewables like solar and wind were competitive in a free market, would we

How impact investment could counteract the rising tide of populism

“If we want to defend the maintenance of an open economy and free societies, then we have to demonstrate that it is not capitalism that threatens the planet and aggravates inequalities,” argues the chairman of Goldman Sachs International. The former Prime Minister and President of the European Commission was the main speaker at the conference

Is Sustainable Investing Moving Into the Mainstream?

Sustainable investing, which incorporates environmental, social, and governance (ESG) criteria into investment decisions, has been gaining more attention among both individual investors and asset managers in the world’s largest institutions. These are investors who are heeding urgent challenges, like climate change, and seeking investment solutions that can deliver real impact. And they’re seeing that proactively

Sustainable Investing: Debunking 5 Common Myths

It began as a niche desire. Originally, sustainable investing was confined to a subset of investors who wanted their investments to match their values. In recent years, the strategy has grown dramatically: sustainable assets totaled $12 trillion in 2018. This represents a 38% increase over 2016, with many investors now considering environmental, social, and governance (ESG) factors alongside traditional

Social Impact Investing: Benefits and Recommendations for Investors

On August 19, 2019, nearly 200 chief executives met to redefine the purpose and role of businesses in society. The outcome of this meeting was a paradigm shift from the long-held corporate orthodoxy that shareholders’ interests are supreme to a standard that promotes “an economy that serves all Americans.”  Although not entirely a new phenomenon,

Creating sustainable capitalism

Responsible investing has long been a term in investment vocabulary. Until recently, however, it was on the periphery: a feel-good activity for ethically minded investors, but not a mainstream concern. However, this is changing. Responsible investment strategies are now becoming mainstream. The Principles for Responsible Investment membership now represent assets under management (AUM) in excess of

Ignore Sustainable Investment at Your Own Peril

Evidence is mounting that ignoring environmental, social and governance (ESG) issues will expose investments to the kind of risk that will ultimately undermine their value, erode returns and possibly even lead to the collapse of the companies or other assets involved. And as sustainable investing goes mainstream worldwide, institutions, fund managers, credit rating agencies and

Use this free tool to see if your investments are sustainable

Investors have a new resource at their disposal to make aligning their portfolios with their personal values easier than ever. The Invest Your Values search tools, created by As You Sow, a nonprofit that promotes corporate social responsibility, “offer investors insight into the environmental and social impact of their portfolios, alongside traditional metrics like financial returns,”

Untapped Opportunities: How Is Impact Investing Poised to Grow?

Demand for sustainable impact investments has grown exponentially over the past decade. Morgan Stanley reports in 2017 that 75% of individual investors were interested in an ESG (Environmental, Social and Governance) approach, and among these investors, 84% of women and 86% of millennials are leading this demand. The Forum for Sustainable and Responsible Investment and Global Sustainable Investing Alliance reported sustainable

Sustainable Investing? Here’s What Millennials Need To Know In The U.S.

It’s estimated that millennials will inherit an estimated $30 trillion of wealth from baby boomers. However millennials have grown conscious about where this wealth should be invested. According to a 2019 Morgan Stanley report, a staggering 95% of millennials are interested in sustainable investing. Climate change is among one of the top three concerns for institutional investors.

As Investors Try To Be More Ethical, Some Find No Escape From Businesses They Detest

If you're an investor with ardent social beliefs — and you aspire to put your money where your mouth is — you're in luck. Today, on Wall Street and beyond, socially responsible investment options abound. For those distressed by gun violence, new weapon-free funds divert dollars from firearms manufacturers and large gun retailers. If climate change is

Measuring impact: sustainable development is not a hard science

How to assess the impact of a responsible investment approach? Some indicators of the Sustainable Development Goals (SDOs) are contradictory and the logic of a product’s “life cycle” is complex. The difficulty of the exercise is like a pretext for inaction. By Ladislas Smia, co-responsible for Mirova’s research, and Philippe Zaouati, Mirova’s Managing Director. For a

On the importance of measurement in impact investing

The call for more thoughtful evidence-use has recently hit a crescendo in impact investing, with high-profile actors showcasing methods for incorporating secondary research into due diligence. This attention to research speaks partly to a growing awareness that much of the data that companies generate on their own fail to pass muster as impact evidence. As concluded

The Hidden Costs of Social Impact Bonds

Risk without cost, gain without pain…the allure of social impact bonds (SIBs), which are actually not bonds but rather “pay for performance” contracts, is easily understandable. In theory, as Bhakti Mirchandani explained in NPQ a year ago, “private investors provide the original funding, and the government only pays if the program achieves targeted outcomes.” The reality, alas, is

The best investment?

We are currently seeing a huge growth in demand from investors for products reflecting environmental, social and governance (ESG) concerns, such that this trend can no longer be dismissed as a fad. Earlier this year, financial analysis and research group MSCI put a figure of $20 trillion on the total of ESG investment products in

Family Foundations Today Want to Make an Impact

The influence of a younger generation of philanthropists on U.S. family foundations is moving these charitable organizations into more intentional, issue-focused giving and has led to greater diversity in governing boards, according to the Trends 2020 study from the National Center for Family Philanthropy (NCFP) released on Wednesday morning. The study, conducted in collaboration with Bank of

Planet, People Concerns Driving Investors Towards Impact

Concerns about health care and climate change are driving an increase in impact investing, according to a recent study by American Century Investments, a global asset manager based in Kansas City. The highest percentage of United States respondents, 30%, said healthcare and disease prevention and cures mattered the most to them for impact investing. The environment and