The UK’s advisory board for impact investing’s latest report provides practical guidelines to help family offices and their advisers navigate the world of impact investing.
Wealthy families are sitting on a combined global wealth of $10trn (€9.2trn). Unconstrained by the limitations of institutional investors, the Impact Investing Institute (III) argues family offices are in a unique position to lead the way on impact investing.
This week, the UK’s national advisory for impact investing launched its ‘Family Offices: A roadmap to impact’, produced in collaboration with Schroders Wealth Management, with the aim to inspire and guide family offices and their advisers in their impact investing journeys.
“At the Impact Investing Institute, we are about action, not talk, and are intent on seeing mobilisation from family offices,” its chief executive officer, Kieron Boyle, wrote on social media following the launch of the guide. “The appetite is there, the capital is there, and a tipping point where this becomes the norm is within reach.”
He added that the London-based organisation is “focused on unlocking £200m of new allocations to impact from high net-worth individuals and family offices over the next two years”.
‘Families can lead the way’
III cited a 2021 research by Cazenove Capital which said that nearly half of its private wealth clients thought environmental and social issues were as important as financial returns.
With around £5.5trn set to pass between generations of wealthy families in the next 30 years in the UK alone, “there is an urgent focus on what choices families will make with their wealth”, Boyle wrote in a foreword in the guide.
Wealthy families and high net-worth individuals can lead the way for other institutional investors when it comes to using their huge pools of capital to address the biggest environmental and social challenges of our time, according to III.
“Where family offices lead, other investors can follow — the $10trn of family wealth showcasing new paths for the over $90trn of institutional capital available globally,” Boyle said.
Partially based on case studies of family offices that have successfully moved into impact investing, the guide promises to offer practical steps, information and resources on how to best present the case for impact investing to other family members; how to create an impact framework; and how to best develop an investment policy statement.
It also looks at the best ways to start allocating funds for impact, the use of external advisers and managers, best practices for impact measurement and management, as well as the importance of peer collaboration.
The ‘Family Offices: A roadmap to impact’ guide can be accessed here.