Phenix Capital: Impact Investing Asset Owner report 2019
Phenix Capital conducted a survey of asset owners and institutional investors to gain clarity on their impact investment mandates.
The highlights of the survey are:
A majority of asset owners interviewed believe that achieving a positive environmental and societal impact is integral to their fiduciary duty.
Almost two-thirds of the survey’s respondents report, or expect, the return on the impact mandate to be in line with that of the general portfolio, although 27% reports or expects higher returns.
Mandates are diverse by geography, asset classes and themes, but the environment is of primary concern. In aggregate investors plan to add to Good health and well-being (SDG 3), Affordable and Clean Energy (SDG 7), and Climate Action (SDG 13).
Particularly for larger portfolios, the lack of opportunity, liquidity and execution are among the biggest challenges reported by impact investors.
Other challenges include sourcing and analysing impact managers and scepticism around impact, with concerns on green-washing and measuring impact.
Different types of investors have different investment requirements: pension funds and insurance companies want to increase their allocations to private market and public debt; while wealth managers and banks currently plan to increase allocation to public markets (equity and debt).
Knowing what is required to shift the dial, as highlighted in this report, is one of the key next steps to collaborating to create solutions to solve the problems.
One way is to learn is from the 33% of institutional investors that have 10% or more allocated.