Advising on impact investment
Introduction
How to use these resources
Resources in this module
Glossary of terms
We have put together a glossary of terms for impact investing
Filter resources by level:
Incorporating impact in addition to ESG in clients’ portfolios
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FT Focus – Retail Impact Investing Uncovered
Financial Times
Reading time: 40 minutes
A detailed survey that delivers high-quality insights around retail impact investing, aimed as an informative read for financial advisors.
What the reviewer found helpful:“Well-researched survey with accessible conclusions. A useful read for anyone that wishes to advise retail clients on impact investing.”
Chris Cullen
Intermediate
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Investing for Global Impact: A Power for Good 2020
Campden Wealth, Global Impact Solutions Today, Barclays
Reading time: 30-45 minutes
The study provides insight into the attitudes and actions of a sample of the world’s wealthiest individual investors, families, family offices, and their foundations when it comes to generating a positive impact with their capital. The study also comments on the impact of Covid-19 in driving interest in sustainable investing and estimates that the average portfolio allocation to impact investing amongst wealthy investors is expected to increase from 20 per cent in 2019 to 35 per cent by 2025.
What the reviewer found helpful:“The evolving perception of impact investing amongst the wealthy investors and investment trends/interests across the sectors”
Kate Munuka
Introductory
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Construction of an Impact Portfolio
Impact Assets
Reading time: 25 minutes
A comprehensive review of considerations for setting up a successful impact investment portfolio. Includes a discussion of practices e.g. establishing goals and objectives and writing an investment policy statement, as well as giving many examples of how impact can be achieved through different asset classes. It also discusses risk, return and impact and how to measure these.
What the reviewer found helpful:“This is a comprehensive report and includes helpful examples of where impact investments can be found across different asset classes, with examples of investors doing this well.”
Mhairi Littlewood
Advanced
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How Investors Manage Impact
Impact Management Project
Reading time: 15 minutes
Answers the questions: why, how and using what data do investors manage their impact? Followed by some thoughts on classifying an impact portfolio into three (ABC) groups
What the reviewer found helpful:“Lovely clarity, brief and with useful tables. Best in class summary and a must-read.”
Chris Cullen
Introductory
✔ Recommended
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Insights from Impact Advisors and Consultants
TONIIC
Reading time: 6-8 hours
The report provides insight on the growing number impact intermediaries emerging worldwide in an effort to demystify and activate private asset owners and investment intermediaries as they consider and develop their own impact practice Key findings of the surveys informing the report include the following: indication of evolution in the intermediary industry, with increasing product and service offerings to suit more and more impact investors’ needs, irrespective of their geographic location, portfolio size, asset class or impact focus; and clients expect their impact to be managed, measured and reported and many advisors have adopted qualitative metrics, while the sector strives to achieve a robust methodology for managing, measuring and reporting purposes.
What the reviewer found helpful:“Perspective of intermediates on various aspects of working with impact investors and growing practices in the impact space”
Kate Munuka
Introductory
Client communication
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Impact Investment Advisor Tool
Department for Digital, Culture, Media and Sport
Reading time: 60 minutes
Survey outcomes and views from financial advisors looking to advise on impact investment. Some example documents to use when discussing impact investing with retail investors or High-Net-Worth clients.
What the reviewer found helpful:“Some guidelines for client discussions, useful for independent financial advisors.”
Chris Cullen
Introductory
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A Practical Guide to Social Impact Investing
Personal Finance Society
Reading time: 60 minutes
Explains the social impact investing approach and shares insight on how it differs from other investment approaches Provides insight on the government and regulatory positions on social impact investment in the United Kingdom as well as industry-led initiatives.
Introductory
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People-powered Investing: tools for individuals to invest for impact
Impact Investing Institute
Reading time: 1 hour (webinar)
The coronavirus pandemic has seen record sums of institutional cash flow into sustainable investment funds, and awe-inspiring acts of philanthropy both locally and nationally. But is there a middle ground for individuals that wish to invest directly in expanding business models that do good in a sustainable way? Is investing outside of banks and stock markets really just for the professionals, or can individuals find ways to invest their savings in social and community enterprises to scale their impact? In this panel discussion, our Lead Expert Jamie Broderick spoke to Daniel Brewer, Chief executive at Resonance, Lyn Tomlinson, Head of impact and philanthropy at Cazenove Capital and Vidhya Alakeson, Chief executive at Power to Change.
Introductory
Regulation – regulatory requirements relating to impact and other sustainable investments
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New ESG disclosure regulation (SFDR) – what private banks, wealth managers and advisers need to know
Allen & Overy
Reading time: 30 minutes
As a further development in the rollout of its green agenda, a new disclosure regulation will shortly come into force in the EU – referred to as the Disclosure Regulation or Sustainable Finance Disclosure Regulation (SFDR). This will require certain firms, including private banks, wealth managers and advisers, to comply with new rules on disclosure as regards sustainable investments and sustainability risks. This briefing gives further detail on the new requirements and when they will come into effect.
What the reviewer found helpful:“Legal primer for private banks and wealth managers.”
Chris Cullen
Advanced
Tax regimes applicable to impact investing
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Making Use of UK Tax Breaks for Impact Investing
McDermott, Will & Emery
Reading time: 5 minutes
This article covers various tax incentives for impact investing including EIS (Enterprise Investment Scheme) and the SEIS (Seed Enterprise Investment Scheme). It outlines how you qualify for these incentives, as well as the potential for these to attract more funding to the early-stage social investment market. It briefly talks about the government’s plan to reform this and the impact this will have on charities and social enterprises.
What the reviewer found helpful:“Technical and detailed short review of social investment tax incentives.”
Mhairi Littlewood
Intermediate
Selection of impact funds that meet client preferences
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Building Impact Portfolios
Philanthropy Impact
Reading time: 60 minutes
Looks to apply Modern Portfolio Theory to Impact Investing, and discusses how investors may choose to maximise social and financial return against an efficiency frontier.
What the reviewer found helpful:“Illustrates a specific optimisation approach to investment selection that may feel pleasantly familiar to investors with an economics background.”
Chris Cullen
Intermediate