Many institutional asset owners (IAOs) seek new strategies to respond to the global challenges of climate change and social inequality. These challenges increasingly impact financial markets and create unpredictability for the future — a particular challenge for IAOs with long-term investment horizons. Applying an impact lens through a holistic portfolio construction approach presents a powerful approach to adapt to this reality. This strategy allows IAOs to tackle global challenges head on, increasing their scope to ensure both financial returns and a better quality of life for beneficiaries and the wider world.
In this report, leaders at IAOs will find a useful, practical guide to apply a holistic portfolio construction approach with an impact lens. The report outlines the steps an IAO can take to implement this strategy, starting with planning and conceptualization and moving toward the ultimate goal of an impact lens applied across an entire portfolio. A specific example scenario of a teacher’s pension fund investing in affordable housing brings practical light to the theoretical framework offered.
This resource is most useful for IAOs beginning or strengthening their impact journey. It draws from two years of roundtable discussions led by the GIIN with 45 unique IAOs about their progress to invest with an impact lens. The report shares best practices and lessons learned to provide a specific roadmap for portfolio construction that includes impact.
As the effects of climate change magnify and social inequalities persist, IAOs need to be proactive and find new ways to responsibly steward assets. Business as usual ignores the realities of beneficiaries’ lives, while a conscious move toward impact investing brings those realities into planning and strategy to build a stronger portfolio. This leaves IAOs better off from both a financial and impact perspective.
Learn more about this approach and the ways IAOs can respond to global challenges with an impact lens by downloading Holistic Portfolio Construction With an Impact Lens: A vital approach for institutional asset owners in a changing world.
