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In brief: Appetite for impact investing high, despite greenwashing concerns

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Published: 27 May 2022

Survey shows investors in Europe, US and Australia are increasingly attracted to the idea of investing for impact. Plus, Future of Plastics Fund makes first investment, and new initiative to back ‘aquapreneurs’ launched at WEF

Investor interest in impact investment continues to grow across geographies, generations and genders | Photo by Gustavo Quepón on Unsplash

Investor interest in impact investment continues to grow across geographies, generations and genders, according to a survey by global asset manager American Century Investments.

Respondents were surveyed at the end of last year in the US, UK, Germany and Australia. The appeal of impact investing has grown in the UK more than any other country surveyed as a result of the COVID-19 driven global economic downturn, rising to 63% (more than three-in-five), up from 48% in 2020, the survey found.

In the US, 61% of respondents found impact investing appealing, up from 51% in 2020, while the appeal grew from 35% in 2020 to 44% in 2021. While the majority of respondents across geographies found impact investing appealing, the highest interest was registered among millennials (67%) in the UK, U.S. (66%) and Australia (68%).

Concerns about greenwashing continue, with at least half of respondents in each country saying they believe greenwashing has increased.

“We see a rising demand for impact investing across geography, generation and gender, along with favourable economics and a supportive political and regulatory environment that will drive changes and advances in sustainable investing over the coming year,” said Sarah Bratton Hughes, senior vice president and head of ESG and sustainable investing for American Century Investments. .

She added: “We expect greenwashing not only to remain a concern, but to expand beyond environmental or climate claims to claims related to all Sustainable Development Goals. The combination of regulatory pressure, investor demand and industry cooperation will help drive clarity, consistency and transparency across the sustainable investing space”.

Future of Plastics Fund makes first investment  

The Accelerating Growth Fund, a subsidiary of climate action NGO WRAP, has made a first key investment on behalf of the Future of Plastics Fund, a new circular economy impact fund being established by Archipelago Eco Investors to focus on issues related to plastic waste and climate.  

The fund’s first investment is Greyparrot, an artificial intelligence waste recognition system and analytics platform which enables better sorting of plastics and other waste streams.  

The Future of Plastics Fund, an Article 9 fund, aims to provide catalytic investment into scalable technologies and solutions across the plastics economy, from packaging to textiles and e-commerce. 

Claire Shrewsbury, director of Insights and innovation at WRAP, said: “The funding required for new technologies to achieve scale is lacking and investment into the plastics economy is essential to enable brands and members of the UK Plastics Pact to meet our ambitious targets.” 

WEF: New initiative to back ‘aquapreneurs”  

A new $15 million investment over five years to support entrepreneurs who can drive innovation in freshwater resource management was announced at this week’s World Economic Forum (WEF) in Davos. 

Freshwater ecosystems around the world are under threat from climate change, with record-breaking droughts in India, France and the US. By 2030, the global demand for water with exceed sustainable supply by 40% 

The initiative launched this week is a collaboration between global conglomerate HCL and UpLink, WEF’s open innovation platform.  

“Today, freshwater resources globally are extremely burdened and every fifth child on this planet faces water scarcity,” said Roshni Nadar Malhotra, CEO of HCL Group. “At HCL we want to make every effort to help resolve this global crisis. Our partnership with the World Economic Forum’s UpLink platform is a step in this direction and our ecosystem approach can be truly transformative.”

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