The Investment Leaders Group (“ILG”) found that the data necessary to assess the social and environmental impact of funds, is lacking.
[The ILG is a global network of pension funds, insurers and asset managers committed to advancing the practice of responsible investment. It is a voluntary initiative, driven by its members, facilitated by the Cambridge Institute for Sustainability Leadership (CISL), and supported by academics in the University of Cambridge.]
While investment performance is regularly reported and standardised, sustainability performance is not, preventing savers from making informed investment choices.
A common approach to reporting investment impact would improve the credibility of investment managers’ impact claims, allow comparability across funds and build trust along the entire investment value chain.
Using limited existing data, members of the ILG developed and tested simple measures to rate the sustainability of different funds on a scale from “very negative” to “very positive”.
Members of the ILG, a global network of pension funds, insurers and asset managers that represent more than $4 trillion under management, tested the framework using practical metrics for six outcomes derived from the 17 Sustainable Development Goals: resource security, healthy ecosystems, climate stability, basic needs, wellbeing and decent work.
Dr Jake Reynolds, Executive Director at the Cambridge Institute for Sustainability Leadership:
“The poorly developed state of impact data today should be a call to action for the whole investment value chain. The reality of environmental and social disclosure is that we struggle to answer one of the most basic questions that can be asked about a fund: Is it doing harm or good?
Download the full report here.