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If sustainability alone is not enough: Impact investing goes beyond the pure ESG concept. Investors also want to initiate change and change something for the better.
Invest and invest money sustainably. For many investors, anything else is no longer an option. It is a basic requirement that the ESG criteria and thus ecological, social and entrepreneurial principles are adhered to. For some investors, however, this is still not enough. They don't just want companies to meet the ESG exclusion criteria - for example, avoid child labor, do not work in the oil or gas business, pay fair wages and demonstrate transparency. They are not only interested in avoiding harm, they also want to actively generate benefits.
The companies in which these investors invest must also make an active contribution to societal, ecological or social change. The key word for this is “impact investing” or “investing with commitment”. What is meant by this is that investors invest in previously determined ecological or social changes. For these changes, specific and measurable goals are specified, which are also checked. At the same time, investors should benefit financially with these investments and generate a corresponding return.
Influence with money
The British investor entrepreneur Sir Ronald Cohen is known as the "father of impact investing". He is Chairman of the Global Steering Group for Impact Investment (GSG), founded in 2015 and, since its inception in 2011, also Chairman of Big Society Capital (https://bigsocietycapital.com/), the UK's first social investment bank. His core requirement is that investments must have positive effects on the environment and society in addition to a positive financial return.
Cohen also recorded his basic principles and thoughts in his book "Impact: A new capitalism for real change". In it, he explains how capitalism can be transformed and how the private sector can be transformed from a polluter and promoter of inequality into a powerful force for good. How opportunities can be distributed more equitably and solutions to the great social and ecological challenges can be found and what role each individual can play in the revolution.
Funds that move
So-called “impact funds” therefore invest directly in companies that, for example, create or finance educational opportunities for future generations, support programs for the preservation of biodiversity or promote, promote and finance the use of renewable energies to reduce global CO2 emissions.
An international example of such a fund is the BlackRock Global Impact Fund (IE00BL5H0Y66). The fund invests in companies whose products or services make an active contribution to making the world a better place. This supports innovations that benefit humanity. The fund is managed by Eric Rice, also one of the pioneers in the field of impact investments. is one of the fundamental questions that Rice asks investors.
Amundi Asset Management has already launched a number of impact funds, such as the Amundi Responsible Investing Impact Green Bonds (FR0013411741), which finances green projects and obliges green bond issuers to disclose environmental information. Amundi CPR Invest Education (LU1951340816), a global themed equity fund, invests in the education sector worldwide. The measurable numbers of this fund: 43 percent of the portfolio was invested directly in education - school, university, lifelong learning. 13,600 schoolchildren and students were given access to education with the help of the fund. The fund contributed to 4.2 million hours of teaching and three percent of management fees were donated to nonprofit educational organizations. There are similar values for the CPR Climate Action Fund (LU1902443420) and the CPR 90 Social Impact Fund (LU2036821820).
The investment funds comply with Article 9 of the Disclosure Regulation of the European Union. The transparency rules for impact investment products were laid down in it.