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Pioneers Post article: Is this the woman who can persuade pension funds to invest for impact?

29 Nov 2019 | 0 comments

First announced in June, the UK’s newest impact investing body launches this week. We met CEO (and former business journalist) Sarah Gordon, who spoke to us about the rise of enlightened boardrooms, why she’s so keen to avoid reinventing the wheel – and why the startup will soon be having a few words with its own pension provider.

Last week, the venture capitalist and philanthropist Sir Ronald Cohen called for a campaign to turn the trillions of dollars held by pension funds and other institutional investors into a force for good.

Now, the UK’s new Impact Investing Institute has added further firepower to these efforts – with pensions a core part of its strategy, announced this week, to mobilise more capital towards the Sustainable Development Goals.

First announced in June and officially launching yesterday in Sheffield and this evening in London, the Institute aims to accelerate the growth and improve the effectiveness of the impact investing market.

CEO Sarah Gordon tells Pioneers Post that training and awareness around pensions will be a “key focus” for the new organisation, which will work closely with Pensions for Purpose, a group that aims to promote understanding of impact investment.

While some pension funds are already doing “really quite innovative and sophisticated work around impact, there are others for whom the word ‘impact’ is a dirty word,” she says. Getting the latter on board will require “confidence- and competence-raising” among pension scheme trustees, financial advisors and pension consultants, as well as individual pension-holders. The Institute hopes to achieve this in part by curating high- quality, “very accessible” information on its website and social media platforms, tailored both for the public and for specialists – with the hope, ultimately, that better understanding of impact investing will lead to more money allocated in that direction.

“For some pension funds, the word ‘impact’ is a dirty word”

For Gordon, who took up the role in September after standing down as business editor for the Financial Times, the startup process has already driven home the need for better information.

“We’ve been on a journey trying to find a pension provider for the Institute – and in fact the difficulty of the journey really bolstered our feeling that our work is necessary,” she says. The organisation settled on government provider Nest – a “perfectly adequate choice”, but one that still doesn’t allow customers “to really understand how you as a Nest pension investor are delivering any kind of impact whatsoever.”

How will they change this? As well as speaking to its own provider, the Institute plans to showcase good examples – she cites the Greater Manchester Pension Fund as one that’s “ahead of the pack in terms of pioneering allocation to impact” – and to identify obstacles. One common hurdle is already clear: “A lot of pension scheme trustees believe that it is incompatible with their fiduciary duty to invest for impact and we’ve already started doing a piece of research to show why that isn’t the case.”

Continue to read the full article here