Over the past few years we’ve witnessed the rise and rise of impact investing. Some say Millennial’s are driving this trend, and I agree, however I believe there is more to it. Around the world people appear to be more socially conscious and have a desire to see their money ‘do good’. From buying products from environmentally friendly purveyors to avoiding the products or services of those with less-than-green credentials.

Last week I met with an adviser who, after several enquiries from clients over recent months, is building a values-based investing proposition. He asked for some guidance and I shared the following resources. After sending it across, I thought DISCUS readers might find it of interest too!

Impact and ESG (environmental, social and governance) Investing

In the words of our friends at EQ Investors:

Impact investing is an exciting and rapidly growing industry, powered by investors who are determined to generate social and environmental impact as well as financial returns.

An ESG framework is a valuable tool that can be used to evaluate how certain behaviours negatively affect a company’s performance, and subsequently drive investing decisions. And as you would expect, most fund managers have now integrated ESG into their mainstream investment process.

Taking this a step further, impact investing takes an active approach to generating positive impact by investing in companies whose products and services have a positive impact, rather than simply avoiding those with a negative impact. Impact investing also adds another element: the ability to measure the effect of the investment.

Three necessary conditions for impact investing:

»  Intentionality. Clearly articulated objectives at the outset, pertaining to both social and financial objectives.

»  Measurement. A tangible commitment to track performance across social and financial metrics.

»  Transparency. A belief in information-sharing and insight into decision making, particularly as it relates to reporting out against expectations.


EQ Investor’s impact investing video

This video clearly explains impact investing, including the United Nations’ Sustainable Development Goals – and how they use these to drive their investment approach.


Practical Guide to Social Impact Investing

Last year the Personal Finance Society launched this Good Practice Guide to Social Impact Investing. It’s an easy read and serves as an excellent introduction to impact investing, along with several tools and resources. It is well worth a read if you are just starting on this journey with your clients.

Webinar series

On 28 March EQ Investors launched a new webinar series titled Bringing Impact Investing to Life (if you click the link you can subscribe and then access the recording on demand). The webinars provide:

»  A live update on the EQ Positive Impact Portfolios

»  Case studies to highlight how companies held within the portfolios are making a positive impact on society and the environment

»  An interactive Q&A session, with the opportunity to ask any questions you may have


Personalised impact reports

You may have seen our article showcasing the EQ Investors online impact calculator tool. It allows advisers to download personalised PDFs to include in their client reports. The reports show exactly how much impact the client’s investments have made, using the methodology developed in EQ’s 2018 Impact Report.

Check out the calculator here


Good Money Week (and more tools for advisers!)

Every year the UK Sustainable Investment and Finance Association (UKSIF, pronounced ‘Uck-sif’) runs the UKSIF Good Money Week campaign, to raise awareness of sustainable, responsible and ethical finance – banking, pensions savings and investments – and help people make good money choices. Each campaign includes a raft of tools that advisers can use in their discussions with clients.

I hope you’ve found these resources useful. I think they’re a great place to start if you’re looking to build, or refine, your impact investing proposition.


This article was created by Abbie Knight for the DISCUS website, referencing several tools and materials offered by EQ Investors. You can find out more about EQ Investors and their discretionary investment services here ›