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New framework helps investment industry to empower savers on the impact of their investments

last modified Jan 09, 2019 12:51 PM
16 May 2016 – The framework takes as its starting point the United Nations Sustainable Development Goals, which have been converted into a set of six impact metrics for investors that measure impacts – both positive and negative – of those assets on important social and environment topics.

Read about the work and download the full report.

Read the press release.

Investors understand their returns in far greater detail than their ‘non-financial’ performance. As a result they have little to say to beneficiaries about the wider impacts of their investments on society. Many investors do not know whether the flows of capital they are responsible for do good or harm in society. If they were to make claims in this area they may be contested: what is good for one stakeholder may very well be regarded as harm by another. 

That is why the Investment Leaders Group (ILG) in co-operation with the University of Cambridge Institute for Sustainability Leadership (CISL) has developed a new framework – to help the investment industry empower savers to understand the impact of their investments on critical global challenges of our generation and to invest in line with their worldviews. The framework takes as its starting point the United Nations Sustainable Development Goals (SDGs), which have been converted into a set of six impact metrics for investors – metrics that do not measure intent or process in the asset base, but impacts – both positive and negative – of those assets on important social and environment topics.

"In the end, responsible investment is all about making a difference. This work represents a critical step towards actually being able to show and understand how investors can contribute to better social and environmental outcomes," said Manuel Lewin, Head of Responsible Investment at Zurich Insurance Group. "As we deliver strong financial returns to our clients, it is increasingly important to us to understand the social and environmental utility of our investments," says Rod Paris, CIO of Standard Life Investments.

The report proposes a simple proxy for each of the six themes and initially develops methodologies for two of them to illustrate how existing stock indices perform against these criteria. The report also calls for a new era in impact-related data collection, which could allow the metrics to be refined to build up an even more accurate picture of impact.


Media contacts

Michael Hoevel | Media Consultant | c/o Marchmont Communications

| T +44 79 62 657 322

Adele Williams | Media & Communications | Cambridge Institute for Sustainability Leadership

Adele.Williams@cisl.cam.ac.uk | T +44 1223 768451


About the Investment Leaders Group

The Investment Leaders Group (ILG) is a global network of 11 leading investment firms convened by the University of Cambridge Institute for Sustainability Leadership. ILG members are: Allianz Global Investors, First State Investments, Loomis Sayles, Natixis, Nordea, Old Mutual, PensionDanmark, Standard Life Investments, TIAA Asset Management and Zurich Insurance Group. The ILG’s mission is to shift the investment chain towards responsible and long-term value creation, so that economic, social and environmental sustainability are delivered as an outcome of the investment management process as investors go about generating robust, long-term returns.

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Members

Investment Leaders Group members. Cambridge Institute for Sustainability Leadership.

 *HSBC Bank (UK) Pension Scheme

Contact

Kajetan

Kajetan Czyz, Senior Programme Manager, Investment Leaders Group