Making a positive impact in listed equities
As part of our continued commitment to sustainable wealth management for our clients, UBP has expanded its responsible investment expertise into impact investing. We are firmly of the view that the financial sector has an essential role to play in creating a sustainable economy.
Impact investing’s accessibility is key if we are to make a meaningful difference, and every investor deserves to be able to align their financial and ethical goals. Capital markets and listed equities have the potential to be huge engines of positive change, as they can boost the accessibility of impact investing to the general investing public.
The ever-increasing pressure to find innovative solutions and technologies which can allow humans and the planet to live in harmony is translating into strong investment inflows for the enablers of these goals. Identifying and supporting these companies is a key tenet of impact investing, as they should be best placed to grow faster and more profitably in the long term than the broader investment universe.
Increasingly, the United Nations’ 17 Sustainable Development Goals (SDGs) are being used as a roadmap for impact investing.
Impact measurement is key
A cornerstone of impact investing is the measurement of non-financial performance, i.e. the impact an investment has alongside financial returns. This allows the end investor to have a much more complete picture of the performance of their holdings.
Key features of impact investing
- Generates financial returns: impact investing is not philanthropy
- Generates social and environmental performance
- Uses the UN’s 17 Sustainable Development Goals as a roadmap
- Primary investment focus is on the products/services offered by a company, not how it is run
- Measures the social and environmental impact alongside financial performance
- Innovation typically plays a leading role in the underlying investments
- Long-term horizon
- Active ownership/engagement