Impact investing has come a long way as a widely accepted investment strategy. But with the increasingly siphoning of capital into impact investing, higher standards are urgently needed. However, two things must happen for impact investing to truly become mainstream.
First, the industry needs standards for assessing real impact, as well as mechanisms for independent verification. An ESG-logo on the fund’s prospectus does not make you an impact investor (sorry!). Claims of impact must follow from rigorous due diligence and performance measures, and independently verified reporting.
It’s time to move from theory to practice; from PowerPoint slides to user-friendly, and cost-effective tools that are available to asset managers and retail investors alike. And even with these harmonized standards and tools in place, we will need to ensure that impact claims are as legitimate as the reporting on financial statements.
Second, as investors allocate funding to impact strategies, they also must “look under the hood” for potentially negative consequences of the rest of their portfolio. Rather than being a thin layer of green paint, impact investing must be the beacon that lights up the way for other, traditional investors, to follow suit – and to apply environmental and social impact assessments to every asset in their portfolios.
Going forward, will we see real change at scale, or will impact investing just be a smoke screen to divert our attention from continual extraction of fossil fuels and exploitative supply chains? Today is the second best days to start make a change!
If you want a helping hand, starting with impact investing – we would gladly help you. Call or email us if you have questions or want to start a conversation.
Disclaimer: Maiyak is a facilitator of investments by independent information. We don’t offer advises or recommendations regarding offered investments. Moreover, Maiyak doesn’t embrace the purchase of any investment products.
