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In search of impact: Measuring the full value of capital

May 2016 – As fiduciaries, investors gain by helping beneficiaries make informed choices about the management of their savings and investments. This report aims to help the investment industry empower savers to understand the impact of their investments on the critical challenges of our generation and to invest in line with their world views.

 

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In search of impactContext

As fiduciaries, investors gain by helping beneficiaries make informed choices about the management of their savings and investments. While the financial performance of funds is readily accessible, their social and environmental impact remains largely opaque, not only to the public but to the industry too. 

About the report

This report, developed by the Investment Leaders Group (ILG), a network of 10 leading investment managers and asset owners, aims to help the investment industry empower savers to understand the impact of their investments on the critical challenges of our generation and to invest in line with their world views.

The framework

This report provides a framework that enables investors to calculate and communicate the social and environmental impacts of their portfolios using a simplified set of six environmental and social themes relevant to investors.

It takes as its starting point the recently adopted United Nations Sustainable Development Goals (SDGs) and converts them through a careful process of clustering, prioritisation and simplification into a set of six impact metrics for investors. 

The framework targets the beneficiaries of investment – individual savers and investors, pension funds, insurance companies, family offices, sovereign funds and all other forms of asset owner – who will be empowered to make up their own minds as to whether their money is doing harm or good, and allocate it in line with their beliefs and values.

Fund factsheets

Impact information can be disclosed in fund factsheets to inform beneficiaries’ choices about fund selection. It can also be used by institutional investors to specify their interests and expectations about impact in ‘request for proposal’ processes, mandates and policy statements. Fund managers, consultants and investment platforms can use the framework to form a clearer view of the impacts of asset choices, both to meet the expectations of clients and beneficiaries and to enhance their position in a growing market for responsible investment products.

Long-term vision

The long-term vision of this work is to enable a revolution in ‘consumer choice’ in financial services, where the social and environmental impact of money is transparent to investment beneficiaries in the same way that it is apparent to food and energy consumers today.

Citing this report

Please refer to this report as University of Cambridge Institute for Sustainability Leadership (CISL). (2016, May). In search of impact: Measuring the full value of capital. Cambridge, UK: Cambridge Institute for Sustainability Leadership.

Published: May 2016

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Lead authors

The lead authors of this study were Dr Jake Reynolds (CISL), Clarisse Simonek (CISL), Hervé Guez (Mirova) and Mathilde Dufour (Mirova). The work benefited from invaluable contributions from the participating members of the ILG, especially Manuel Lewin (Zurich Insurance Group), Andrew Mason (Standard Life Investments), Rebecca Maclean (Standard Life Investments), Alix Chosson (Standard Life Investments), Khalid Husain (TIAA Global Asset Management), and Manica Piputbundit (TIAA Global Asset Management). Expert contributors included Carbone 4, Dr Kirsten Sehnbruch, Chris Tuppen, Dr Gemma Cranston and oekom.

Disclaimer

The opinions expressed here are those of the authors and do not represent an official position of CISL, the University of Cambridge, or any of its individual business partners or clients. This report is not, and should not be construed as, financial advice.