Impact investing could become ESG norm
Impact investing could come at the forefront of ethical investing in the next decade, as investors look beyond current environmental, social and governance (ESG) funds and into more direct impact investing action, according to AXA Investment Management (AXA IM).
Matt Christensen, AXA IM global head of impact strategy and responsible investments, said biodiversity loss, diversity and public health would be key issues in impact investing.
“As we move from an ESG integrated world to a [UN] SDG [sustainable development goals] outcome world, that impact and how we measure it is going to become the key area of focus the next 10 years,” Christensen said.
“It will be about how do we look at impact investing, what do we do to measure it and how do we target that impact over time.
“But it’s also going to be about having some humility, because as a financial services provider, there are some areas of impact that are probably better done through charitable donation or philanthropic work than through investment work.
Christensen said voting had become an important means of communication with companies and it was important to think about how to vote in a way that’s meaningful.
AXA IM said more than 40% of its engagement with companies was focused on climate change issues, but this could be used for other issues.
It said 217 issuers were engaged in roughly 6,000 meetings that were voted upon which included over 64,000 resolutions.
“It’s always done with the idea of how we think our voting will benefit a long-term sustainable view of the company’s resilience in tackling key issues around ESG and the profitability of the company,” Christensen said.
“The Climate 100 program has been important for us, but there’s also areas around gender diversity and other themes.”
AUTHOR
Chris Dastoor
Recommended for you
Outflows from an Australian private markets fund manager have caused FUM at Pacific Current to decline by $1 billion in the last quarter.
Former RIAA chief executive Simon O’Connor has joined the ethical advisory panel at U Ethical Investors.
Financial services leaders are “all cashed up with nowhere to grow” when it comes to M&A activity, according to Deloitte, with 90 per cent saying they have strong balance sheets ready for an acquisition.
As fund managers are urged to diversify their product ranges, they are finding a faster way to do this is via an acquisition of existing firms but experts say it is not without potential culture clashes.
