Shifting attitudes and growing social and environmental awareness are reshaping our world.
Consumers are highly aware of the environmental and social impact their spending habits can have.
Investors are increasingly demanding that their investments not only deliver sustainable financial returns, but also reflect their ethical or moral values. And regulators are enforcing more stringent environmental and social protections.
European companies are at the forefront of this sustainable revolution, leading their industries in sustainability agendas.
As asset managers, we too have a role to play.
A high-profile, galvanising force for positive change has been the UN’s Sustainable Development Agenda.
At the end of 2015, the UN set out 17 sustainable development goals designed to help governments and regulators meet the most pressing global challenges.
The task is a sizeable one. According to the UN, it will require around $5-7tn (£4-5.7tn) annually to meet its agenda.
As a result, the SDGs have rapidly become a call to capital for investors and asset managers alike.
One increasingly popular way asset managers can help meet the UN’s agenda is through impact investing.
This involves investments that seek to have a measurable positive environmental and social impact alongside financial returns.
With their strong sustainability credentials and global leadership on social and environmental issues, and early adoption of the SDGs into strategy and business practices, European companies are an attractive opportunity for impact investing.
From across the region, we are seeing numerous companies whose products, services and business models provide solutions contributing to positive change in areas such as healthcare, education, agriculture and energy – opportunities for active investors abound.
While measuring financial returns is relatively straightforward, quantifying positive environmental or social impact is more difficult.