In a panel discussion with other investment professionals titled “How is impact investing helping private banks and the UHNW sectors find their competitive edge and gain a distinct identity”, Victoria spoke about how listed equities can contribute greatly towards helping Impact investing out of its niche.
The beauty of public equity markets is that they provide the power and scale required to achieve real change.
Additionally, their sheer volume ensures that there is a significant number of promising opportunities on the market at any given time. The chance to preserve the environment’s biodiversity, for instance, is one such opportunity that is increasingly coming within reach of investors.
There are fears present in some quarters that listed companies are ill-suited to Impact investing due to the lack of direct influence from investors in secondary markets. Victoria points out that while this can be an issue, structured and rigorous engagement can be a genuine driver of change.
Indeed, corporate executives are increasingly willing to engage with investment managers on the environmental and social impact of their companies’ business activities.
In UBP’s experience, regular engagement can be very effective. We are now at a stage where companies really get the point of Impact investing and of what it tries to do. Far from being a disadvantage, Victoria points out how the accessibility of listed equities actually helps individual investors engage with their savings.
One ongoing theme in Impact investing is the need for increased corporate disclosure around environmental and social impact, as well as the standardisation of this data.
UBP takes a dual-track approach by collaborating with other industry practitioners to encourage improvement in this area, while at the same time being pragmatic with the information at hand. This is made possible by close engagement with corporates, accompanied by the identification and monitoring of key impact indicators.
Some see Impact investing as an asset class in its own right, however what UBP’s Impact investing team considers to be of most interest is the chance to apply the Impact investing methodology to more and more existing asset classes. Once it has spread across the spectrum, Impact investing will have come of age.