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GIIN releases roadmap for impact investing in listed equities

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Published: 31 March 2023

Can investors achieve impact when investing in stocks? The GIIN’s just-published guidance, the result of a collaboration involving more than 100 investors, aims to assist those seeking to generate impact in public equities.

The guidance is designed to help asset owners and asset managers seeking to generate impact when investing in public equity markets | Photo by Phongphan5922 on iStock

The Global Impact Investing Network (GIIN) has just released a guidance for investors seeking to achieve impact when investing in listed equities.

The “Guidance for Pursuing Impact in Listed Equities” is the result of a multi-year project involving more than 100 investors. It covers the four main aspects of listed equities impact investing: setting a fund or portfolio strategy, portfolio design and selection, engagement, and the use of performance data.

According to the sector body, the guidance is designed to help asset owners better distinguish the “differences between fund offerings in relation to their
specific impact goals”. It also aims to help asset managers understand the expectations that should be considered when it comes to fund and portfolio

The document also includes two key concepts that investors should consider when designing, implementing and managing listed equities impact funds. The first one is ‘investor contribution’ which the GIIN describes as the “activities and actions that investors take to support, accelerate, or enhance the ability of a company to deliver impact”.

The second key concept is the ‘theory of change’, meaning “the conceptual framework that outlines how an investor anticipates their approach to portfolio design and management approach will result in the desired impacts”.

“As consumer and investor demand grows for products that generate positive social and environmental impacts, listed equities present an opportunity to unlock even more capital for impact,” said Sean Gilbert, chief investor network officer at the GIIN. “Our aim with this guidance is to provide investors with a clear roadmap for impact investing in listed equities.”

The publication is the culmination of a project which started in 2019 with the creation of the GIIN’s Listed Equities Working Group, following an investor survey which identified listed equities as one of the fastest growing asset classes for impact investing.

The “Impact Investing in Listed Equities- Strategies for Pursuing Impact” published in 2021, included the results of preliminary research by the working group on market trends and engaging with fund managers offering investments identified as impact funds. Following this publication, the group focused on future practices and developed a draft version of the guidance, which was released for consultation last summer.

Amit Bouri, CEO and co-founder of the GIIN, described the guidance as the result of “profound industry collaboration and openness”. He added: “By using and sharing this guidance, investors can help scale the industry with integrity and distinguish the practices of impact investing in listed equities.”

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