Investing for global impact, an unprecedented look at the finance that is changing the world
Environment — di Valentina Neri
More and more wealthy families have an eye for the Planet. The figures from “Investing for global impact” prove it.
Investing for global impact, an unprecedented look at the finance that is changing the world
More and more wealthy families have an eye for the Planet. The figures from “Investing for global impact” prove it.
Do wealthy families around the world think only of enriching themselves at any cost? Perhaps that has been the case in certain instances, but fortunately their outlook has changed considerably over the years. Those who hold million-dollar fortunes are increasingly seeking to use them to improve the world. The report "Investing for global impact" proves it.
What is "Investing for global impact"
"Investing for global impact" is a report produced by the Financial Times, in partnership with GIST (Global Impact Solutions Today) and with the support of British bank Barclays. It has now reached its fourth edition, which was presented at the end of March in Paris. It is a one-of-a-kind study, because it examines two major worlds. The first is that of impact investing, meaning investments that aim to deliver both a financial return and a positive, concrete and measurable impact on the Planet and on people. The second is that of philanthropy, meaning genuinely charitable activities that — unlike investments — involve no expectation of return.
Who took part in the survey
The survey is also notable for its choice of respondents. While other similar studies consult banks, pension funds or insurance companies, "Investing for global impact" focuses on those who manage the capital of wealthy families: foundations and family offices. While the former are usually well known, family offices are rooted in the American world and are almost unheard of in Italy. These are service companies that manage the assets of one or more wealthy families (in the latter case referred to as multi-family offices or multiclient family offices). On one hand they provide financial, tax, strategic and philanthropic advice; on the other hand they manage investments; and, finally, they handle administration and accounting. They may be independent companies or offshoots of large banks.
In total, 246 different organisations took part in the survey, coming from 45 countries. A number that grew by 35 per cent compared to the previous edition, also because (for the first time) the researchers consulted, through specific questionnaires, some family offices and foundations that are currently not active in impact investing and philanthropy. This was done to understand what is holding them back and to monitor their future developments.
Impact investing is now a reality
From "Investing for global impact" some encouraging figures emerge. In the decisions of wealthy families, non-financial factors such as CSR and ESG (environmental, social and governance aspects) are beginning to take up more and more space. It is the general view that impact investing is a more effective choice than philanthropy. There is more: impact investments are no longer "exceptions", but an integral part of wealthy families' investment portfolios, on a par with all other financial instruments. This is by no means a given, considering that they are the "latest arrivals" in the large family of responsible investments. And, in certain respects, the most advanced and innovative strategy.
For years, the greatest obstacle to sustainable investments was the fear of sacrificing returns. But this false myth has been disproved by the facts. This year, 90 per cent of family offices and foundations obtained positive financial returns from their impact investments, in line with market rates. Indeed, in 75 per cent of cases these performances met, or even exceeded, expectations. 88 per cent of respondents say the same regarding social returns.