Today, there is ever-increasing awareness of the need to factor environmental concerns into investment decisions. But what specific criteria do investors and asset managers need to take into account when creating their portfolios? Peter Lorange sets out the issues and outlines some general approaches.
Since its “officially” tracked inception back in the mid-1990s, or at least when it started to be of significant interest, impact investing has seen dramatic growth. According to many, this trend will continue upwards due to increasing climate problems, government and business commitments to these, and the increasing voices of younger-generation investors who are statistically more conscientious and concerned with “making a difference” and who want their investments to make more than money (these are often referred to as “personal values investors”).
In this note, we shall discuss the following aspects of the impact investing phenomenon:
• Climate deterioration as a key driver behind the development of impact investment.
• Emission of atmospheric pollutants, including CO2
• Implications for:
• investors
• asset managers
• corporations
• The challenge of reporting.
Recently we have been seeing dramatic changes in the world’s climate, mostly for the worse.
At this point, it should also be noted that there are several “competing labels” to impact investing, “responsible or socially responsible investing” (which reduces harm) or “sustainability investing” being perhaps the most commonly used alternative, or even “regenerative investing” (which increases capacity). However, in this article, we’ll use only the impact investing label.
Global warming – the key driver
Recently we have been seeing dramatic
