By Andrei Skvarsky.
Impact investing, besides social and environmental benefits, its raison d’etre, quite often involves business advantages over conventional investing, a survey suggests.
Such was a common assumption among 229 organisations across the world, mostly financial companies, that were impact investors and were questioned by the Global Impact Investing Network (GIIN) non-profit in a 2018 annual survey.
The respondents were collectively managing $228bn in impact investing assets.
Logically, moral considerations were the paramount motive for impact investing of nearly all the respondents.
However, presumed opportunities for “exposure to growing sectors and geographies” were among the motives of 74 per cent of them, according to a statement from London-based real estate agency Savoy Stewart that analysed the motivation part of the survey and was published by the Journalistic.org media company.
This was a “very important” motive for half the respondents in that group and a “somewhat important” consideration for the other half.
In the same vein, another 74-per-cent category saw impact investing as more attractive financially than conventional investing. This was a “very important” factor for nearly half the interviewees in that group and “somewhat important” for the rest.
The majority of respondents, 13 per cent of which were foundations and the rest were financial firms, mostly fund managers, banks, family offices, pension funds and insurers, were headquartered in the United States, Canada or Europe.
Moral considerations were the determining motive of 91 per cent of respondents – the latter took the questionnaire option, “It is our central mission to intentionally pursue impact through our investments.”
Responding to client demand was also a significant motive, being “very important” for 46 per cent and “somewhat important” for 40 per cent. It was “not important” for 14 per cent.
Meeting regulatory requirements was unimportant as a motive for 79 per cent of respondents. It was “very important” for only 9 per cent and “somewhat important” for 12 per cent.
Portfolio diversification was also a minor factor – it was “very important” for only 22 per cent, “somewhat important” for 33 per cent and “not important” for 46 per cent.
The GIIN disregarded the percentages of “not sure/not applicable” responses.
Two-thirds of respondents made only impact investments and one-third both impact and conventional investments, the GIIN said.
It said 45 per cent of respondents invested primarily in emerging markets and 42 per cent mainly in developed markets.
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