Over the past 10 years, the investment industry has broadened its focus beyond financial statements to increasingly consider environmental, social and governance (ESG) factors. While for many the primary motivation for considering ESG factors is to improve investment returns, encouraging better management of ESG risks can both improve the sustainability of financial returns and outcomes for the communities in which they operate. Some investors are now seeking to take a step further, from integration to Impact.
Impact investing involves investment in assets that seek to deliver a positive social and/or environmental impact alongside a financial return for the investor. This month's edition of MyConsultant discusses the emerging field of impact investing, explaining what it is and outlining the challenges faced by institutional investors considering impact investments today. The article then goes on to consider the trends that are expected to support the maturation of institutional investment in the impact market, including growth in the availability of impact investments that meet institutional investor's scale and return requirements, Australian and state government support for the development of the domestic impact investment market and the growing focus on impact in the responsible investment community.