A four-part framework has been released by the UN Principles for Responsible Investment (PRI) to help asset owners and managers intentionally generate a positive impact through their investment activities. The guide – co-published by the Generation Foundation and the UN Environment Programme Finance Initiative – follows on from and helps implement the findings of ’A Legal Framework for Impact’, a joint project which outlined the basis for achieving sustainable impact in 11 jurisdictions. It characterises the four steps to sustainable impact as determining intention, setting real-world sustainability goals, taking action through a combination of tools, and measuring progress. The framework distinguishes between an ‘instrumental’ approach, where the sustainability impact is integral to realising the investor’s financial goals, and ‘ultimate ends’, where the impact sought is pursued alongside the investor’s financial goals. “The Legal Framework for Impact project showed that the debate is shifting from whether investors should consider sustainability outcomes at all, to asking why – and how – investors can play an effective role in addressing proactively sustainability challenges, as relevant to their duties and obligations,” said Margarita Pirovska, Director of Global Policy at PRI. Separately, investment consultants bfinance said more than more than half of global asset owners were engaged or interested in impact investing, based on a survey of 300 senior investors at firms representing US$7 trillion AUM. A quarter of investors said they intended to increase exposure to impact strategies. A study of 150 UK-based institutional investors by Legal & General found that impact and sustainability mandates would account for nearly half of private markets portfolios in two years’ time.
