As ESG investing becomes the norm for owners and asset managers, “some develop their impact investing from it,” said Jane Bieneman, senior advisor at Tideline Advisors LLC, investment consultant at impact in New York.
Ms. Bieneman became involved in impact investing in 2007 as momentum gathered momentum before being derailed by the global financial crisis. “It’s really different for me this time around, with the (investment) infrastructure being built. And there’s a real sense of urgency around environmental and social issues that weren’t there before,” he said. she declared.
The Global Impact Investing Network’s 2020 Annual Investor Survey, the most recent data available, recorded the highest number of respondents in the report’s 10-year history – 294 global impact investors with a total of 404 billion dollars in impact investment assets under management. The estimated total size of the global impact investing market of $ 715 billion is based on GIIN’s database of over 1,700 impact investors.
These investors – 54% in developed markets and 30% in North America, indicated that the global impact investing market is maturing, with increased sophistication in impact measurement and management practices. contributing to growth. The main sectors for their capital allocations were energy and financial services, excluding microfinance.
Then there are investors who may not have a specific impact investment compartment but who share the objectives. “It looks different in language,” said GIIN co-founder and CEO Amit Bouri in New York. Some will use it to contribute to specific SDGs or to target priorities such as climate solutions, but it’s all 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 the long-term stewards of capital. We are seeing a much greater interest in how they can use capital to drive change, ”Mr. Bouri said.
For the $ 299.8 billion California State Teachers Retirement System in West Sacramento, the goal of impact investing is to secure the future of its retirement beneficiaries. .
“We believe there is an opportunity to do this with a positive impact,” said Nicholas Abel, chief investment officer, who co-manages the sustainable investment and management strategies of CalSTRS, where the investment policy adopted in March authorizes up to 5% of pension funds. assets to invest in public and private portfolios.
“Our success is tied to global economic growth and prosperity,” said Mr. Abel. “We recognize that the world around us is changing. We believe this creates an opportunity. We’re very excited. “His team’s goal is to place a first billion dollars and, over the next few years, a total of nearly $ 2 billion in impact-related investments, such as affordable housing. and low carbon approaches.
Turner Impact Capital LLC CEO Bobby Turner, whose Santa Monica, California-based company has $ 1.4 billion in committed capital to invest in educational institutions, multi-family housing and healthcare facilities , said that “the pandemic has been a blessing and a curse. . The blessing is that he absolutely highlighted the limitations of government in solving these problems. ”
The downside is that “now it’s very fashionable to be an impact investor. I think there is still a lot of confusion on how to define it, ”he said. “The foundations are often lighter; pension funds tend to be the last, but they also have the most money. I think they will come to the table eventually, but they will need (proof), ”said Mr. Turner.