Our goal

We want to make it easier for pension schemes to invest with impact and support them in reducing negative impacts and risks like carbon emissions, biodiversity loss, poor governance and inequality that arise from their portfolio, something many pension schemes are keen to do. Going one step further, more and more pension funds are interested in investment opportunities that have positive impact and secure a competitive financial return and we want to help them explore those options.

What we are doing to achieve it

We are working across the pensions industry – with pension schemes, investment consultants, asset managers, policy makers, lawyers and industry experts – to debunk some common myths about impact investing. The most common misconception among pension trustees and advisors, who are understandably concerned about their fiduciary duties, is that impact investing means sacrificing financial returns.

Practical principles to empower pensions to invest with impact

Together with leading practitioners, we have developed four Impact Investing Principles for Pensions, which provide practical guidelines on how pensions can pursue an impact investing strategy. We also published examples of pension funds that are already successfully integrating impact into their investment decisions.

How were the Principles designed?

The Principles were designed and tested through consultation with people across the pensions industry, in partnership with Pensions for Purpose.

They offer a good governance framework which tackles the investment process at every stage in the investment chain – from how pension schemes can put in place objectives and set an implementation framework, to how to hold investment consultants and managers to account, and how to report on what is being achieved through a balanced measurement framework.

Who can use the Principles?

The Principles are for trustees, local government pension scheme (LGPS) committee members, advisers and in-house investment teams across the full spectrum of pension schemes.

They are also a useful tool for investment consultants, fiduciary managers and asset managers who play a vital role in enabling the implementation of these Principles.

How can you take action? Become an adopter

Join our Adopters Forum – a member forum of pension funds, investment consultants and fiduciary managers that have committed to the Impact Investing Principles for Pensions. The Forum is run by Pensions for Purpose in partnership with the Impact Investing Institute to advance the Principles, share best practice and encourage more pension funds to invest with a positive social and environmental impact.

Members of the forum benefit from:

  • A unique peer network where members can share experiences in pursuing impact investing
  • Being at the forefront of a growing area of investment opportunities
  • A quarterly newsletter
  • Invitations to quarterly events
  • Case study and research material
  • An invitation to Pensions for Purpose’s Annual Awards Event which will feature an Impact Investing Adopters Award for Pension Funds

Become a supporter or share your experience

You can become a supporter of the Principles if you are an industry body or an organisation working with pensions and support our Principles. But even if you are not ready to become a supporter, we want to hear from you. Do you have any successes or challenges around impact investing which you would like to share with us? Could your experience be a case study? Get in touch with us at pensions@impactinvest.org.uk

Fiduciary duty is not a barrier to impact investing

To address the common myth that impact investing is at odds with pension trustees’ fiduciary duty – the legal obligation on trustees to act in the best interest of the scheme’s members, we produced a legal paper that explains how fiduciary duty and impact investing are compatible. The paper was written and attested by five leading law firms and reviewed by a number of other lawyers and experts.

We also produced a short explainer video debunking some of the most common misconceptions about impact investing with the generous sponsorship of Barnett Waddingham.

Publications

In June 2021, the Institute submitted its response to the Department for Work and Pensions’ consultation on the consideration of social risks and opportunities by occupational pension schemes. The Institute strongly welcomes the consultation’s foresight in recognising the increasing importance of social factors for investing.

In our first impact report for 2019-20, we are reflecting on our achievements of our first year and are looking ahead to how we can work towards our goal of improving people’s lives, as more capital contributes to addressing social and environmental challenges.

We developed four guiding principles for pension schemes that give an accessible, practical insight into the opportunity presented by impact investing and the concrete steps trustees can take to pursue an impact investing strategy.

Learning Hub modules

Private capital, including pension money, can address place-based inequalities across the UK and secure financial returns at the same time. This module explores how.

Place-based impact investments are made with the intention to yield appropriate risk-adjusted financial returns as well as positive local impact, with a focus on addressing the needs of specific places to enhance local economic resilience, prosperity and sustainable development.

Local government pension funds have a legacy and interest in local investing. If 5% of LGPS funds were allocated to local investment this would unlock £16 billion for place-based impact investing, more than matching public investment in levelling up.

News & Views

We have worked across the pensions industry – with pension schemes, investment consultants, asset managers, policy makers, lawyers and industry experts – to ‘debunk’ some common myths about impact investing and design practical resources that pension schemes can use to start taking action.

Events

The UK continues to experience significant shortages of affordable housing and yet the role of private finance in contributing answers to this…

Combining gender and climate considerations expands the opportunity landscape for relevant, dynamic and impactful investments. Join leaders from the GenderSmart investor and…

New research out now

White Paper: Scaling up institutional investment for place-based impact

Our joint white paper “Scaling up institutional investment for place-based impact,” based on the collaborative “Place-Based Impact Investing Project (PBII)” by the Impact Investing Institute, The Good Economy and Pensions for Purpose, sets out the case for institutional investors to adopt a “place-based lens.”