As ESG investing becomes the norm for asset owners and managers, “some are building impact investing from it,” said Jane Bieneman, senior advisor at Tideline Advisors LLC, an impact investing advisor in New York.
Ms. Bieneman joined impact investing in 2007 when momentum built before it was thrown off track by the global financial crisis. “For me it feels really different this time because the (investment) infrastructure is being expanded. And there is a real urgency on environmental and social issues that wasn’t there before, ”she said.
The Global Impact Investing Network’s 2020 Annual Investor Survey, the latest data available, had the largest number of respondents in the report’s 10-year history – 294 global impact investors with $ 404 billion in assets under management. The estimated total size of the global impact investing market of 715 billion US dollars is based on the GIIN database of more than 1,700 impact investors.
These investors – 54% in developed countries and 30% in North America – reported that the global impact investing market is maturing and increasing refinement of impact measurement and management practices is contributing to growth. The main sectors for their capital allocation were energy and financial services, excluding microfinance.
Then there are investors who may not have a specific impact investing bucket, but who share the goals. “It shows up differently in the language,” said GIIN co-founder and CEO Amit Bouri in New York. Some will use it to contribute to certain SDGs or to set priorities like climate solutions, but everything is done from a risk mitigation perspective. “There is a migration path that investors go through to think about risks and solutions,” he said.
“Pension fund managers see the writing on the wall. They are stewards of long-term capital. We’re seeing a much greater interest in how they can use capital to drive change, ”said Bouri.
For the $ 299.8 billion West Sacramento State Teacher Pension System, the goal of impact investing is to secure the future of its retirees.
“We believe this has a positive impact opportunity,” said Nicholas Abel, Investment Officer who co-manages CalSTRS ‘sustainable investment and stewardship strategies, which included up to 5% of the pension fund’s investment policy, which was approved in March . Assets to be invested in public and private portfolios.
“Our success is tied to global economic growth and prosperity,” said Abel. “We realize that the world is changing around us. We think this is an opportunity. We’re very excited. “His team’s goal is to raise $ 1 billion in impact investments like affordable housing and low-carbon approaches over the next few years.
Turner Impact Capital LLC CEO Bobby Turner, whose Santa Monica, Calif. Company has $ 1.4 billion in committed capital for social impact investments in education, apartment buildings, and healthcare facilities, said: “The pandemic was on A blessing and a curse. The blessing is that it has absolutely shown the government’s limits in solving these problems. ”
The downside is that “it is very fashionable now to be an impact investor. I think there is still a lot of confusion on how to define it, ”he said. “Foundations are often easier to move; Pension funds tend to be the last, but they also have the most money. I think they’ll come to the table at some point, but they’re going to need (proof), ”said Mr. Turner.