News and Views

Update: Looking inward and ahead

23 Jul 2020 | 0 comments

This year continues to present us with new challenges, but also a renewed conviction of the importance of the work in which we are all engaged. At the Impact Investing Institute, our work is focused on achieving our vision of improved lives for all, as more people choose to use their savings and investments to help solve social and environmental challenges, while seeking a financial return. In light of the Black Lives Matter protests around the world, we are looking inward to review the Institute’s practices and people policies to ensure diversity is properly integrated into what we do as an organisation.

The last two months have been very productive ones for the Institute. We have been making progress on several different workstreams, including the compatibility of pension trustees’ fiduciary duty and impact investing, impact measurement, management and reporting in the social housing sector, placed-based impact investing, as well as the development of a learning framework for impact investing.

  • We recently shared our work on the compatibility of pension trustees’ fiduciary duty impact investing at a conference organised by the legal network for social impact (esela). It was great to see such an engaged audience of mostly pension lawyers responding with such interest to the arguments explored by our panellists. As part of the conference, we also introduced our ‘Principles on Impact Investing’, to help pension trustees integrate impact considerations into their governance and investment decisions. We are about to launch a consultation process on these principles.
  • Improving reporting of environmental and social outcomes is one of our key objectives. In our response to the European Commission’s consultation on the Non-Financial Reporting Directive we argued that organisations should be required to measure, manage and report their positive and negative impact on people, planet, and the economy. This is critical both to an organisation’s business strategy and also wider public interest, and it enables stakeholders to hold boards, asset owners and their investment managers to account.
  • We want to see broader competency in impact investing across the investment profession. With the support of representatives from across the investment sector, we have created a learning framework to make it easier for investment professionals to learn about impact investing and integrate it into their work. We are discussing this framework with professional bodies, trade associations and other organisations providing training programmes and qualifications to help them integrate impact investing into their curriculums.
  • Together with the Green Finance Institute, London School of Economics and a small group of key stakeholders, we are working on the design of a “green+” sovereign bond, combining environmental and social impacts, which we believe could serve as a vehicle for the UK government to stimulate the economy and support a just transition to a net-zero carbon economy, as well as address some of the severe economic and social consequences of the pandemic.
  • We are building an evidence base for impact investing, with a particular focus on information that will help pension funds understand and potentially incorporate impact investments into their portfolios. We have started by commissioning research on social housing as an impact asset class suitable for pension and other institutional investment.
  • The Institute contributed to the publication of the White Paper ‘UK Social Housing – Towards a Sector-Standard Approach to ESG’, which is open for consultation until 31 July. For anyone who would like to contribute, you can do so here. The results of the consultation will be presented in early autumn.
  • We co-hosted the launch of the IMP+ACT Classification System, a technology solution that aims to make information about the social and environmental impacts of funds more transparent. We also facilitated a session on how financial system actors can play their part in achieving the Sustainable Development Goals (SDGs) at the World Benchmarking Alliance Allies Assembly.

We hosted several webinars on building back better after coronavirus, on how pension funds can invest with impact and how shareholders can engage more effectively with companies to drive social and environmental change. We would love to hear from you to know which topics you want us to cover in upcoming webinars by clicking here.