Institutional asset owners are increasingly interested in incorporating social and environmental factors into their portfolios and investments strategies. The pandemic, the climate crisis, and other social and environmental challenges have all signaled a fundamental need for change – to allocate more capital into investment products that incorporate some consideration for the real-world outcomes that the investments generate.
Institutional asset owners have an immense opportunity to generate change, as they possess both the capital and scale to address the world’s most pressing social and environmental challenges while meeting their fiduciary duty. In order to achieve this potential, institutional asset owners must set impact priorities and targets; however, many face challenges doing so. This research brief is the first in a series, focused on helping such asset owners do this work more efficiently and effectively.
The report dives into these investors' approaches to setting impact priorities and targets - unpacking challenges they face when assessing impact priorities, identifying ways of turning these challenges into opportunities to achieve greater impact, and outlining next steps investors can take to set targets and integrate social and environmental priorities into their investment processes. Specifically, the report offers insights and practical examples into how institutional asset owners are integrating real-world outcomes, or impact, into their portfolios and investment strategies alongside risk and return and within a fiduciary context.