Trustees need to actively engage with impact investing if they want to deliver financial returns for members while meeting social and environmental targets, according to the latest report from Aon.
However, rather than investing in more niche or specialist solutions, Aon’s new report examines the opportunities for impact investing within publicly traded equities.
It says the opportunity for impact investing has grown in recent years, due in part to the increased focus on delivering investment returns while achieving a positive impact on people and the planet.
Additionally, the need to address mega-trends, such as the climate crisis, resource scarcity and demographic changes, is driving a worldwide industrial restructuring and is shifting the basis of competitive advantage among companies.
The report — Investing for impact: Exploring opportunities in publicly traded equities — adds that there is now s “increased pressure and attention” on trustees to address some of the most pressing environmental and social challenges, while also continuing to deliver competitive risk-adjusted returns.
Aon’s head of responsible investment Tim Manuel says: “This latest paper looks to help trustees navigate the vast and complex universe of goal setting and impact measurement challenges.
“As we saw in our Global perspectives on Responsible Investing survey earlier sustainability is climbing up the trustee agenda. For those looking to contribute to the sustainability challenges we face, a broad approach towards impact investing in publicly traded equities is attractive.
“We believe trustees should actively engage with impact investing and seek out investment opportunities which offer the rewards of risk mitigation, financial returns and impact.
“A multi-faceted investment approach within public equity markets is an optimal approach, using a blend of managers while retaining diversification in a wide and liquid investment universe.”
