The Global Impact Investing Network (GIIN) have been trying to encourage mutual funds in to the impact investing world in order to help fill an estimated $2.5 trillion funding gap to help achieve the UN’s Sustainable Development Goals (SDG).
This estimation comes from M&G Investments, as they state between 2015-2030 per annum this is the amount of money lacking in the system to be able to achieve these goals.
Veronique Chapplow, investment specialist at M&G said: “The more time that goes by that we do not deal with this gap in funding the larger this problem will get.”
The GIIN who are seen as the police force for the impact investing network are happy for mutual funds to be involved as long as they stick to the rules of impact investing.
M&G feel that the fund manager community could play a pivotal part in plugging this funding gap.
The UN’s 17 SDGs set up in 2015 have added to the desire for impact investing. Ben Constable-Maxwell, head of sustainable and impact investing at M&G said: “The SDGs have been a real catalyst for change in investors as for the first time they have a clear goal.”
Explaining the history behind this move to be more ethically driven in investments Ms Chapplow explained the history behind the movement. She said Environmental, Social and Governance (ESG) is a term that was created around 10 years ago.
During the last five years we have seen the emergence of impact investing and sustainability investing. The main difference between the two being that with impact investing you are required to measure and report on the amount of positive change your investment brings about. This is not necessary for sustainability investing.
William Nicoll, co-head of alternative credit at M&G also highlighted how there are higher levels of interests in different countries towards impact investing. He said In Sweden there is a much higher level of interest compared to that of the UK, especially when it comes to pension funds.
He has often come across people agreeing that impact investing is defiantly possible but always end with the question why do it?
Mr Constable-Maxwell explained that funds in this area are relatively new as the oldest fund is only three years old. In November 2018 M&G launched the M&G Positive Impact Fund which is managed by John William Olsen. The fund invests in companies that have a positive impact on society.
Impact investing refers to investments made into companies, organisations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return.
M&G is an asset manager which manages £285.8 billion in assets for its customers.
