In 1885, Nathaniel Mayer Rothschild became one the UK’s first impact investment managers when he established a fund that promised to provide “commodious and healthy dwellings” for the working class in east London — and a 4 per cent return for investors.
But even with the fund’s success, both for the people living in the affordable homes and for investors, it would take more than a century for the impact market to gain traction.[…]
As that money flooded in, the sector evolved. The wealthy individuals and philanthropists who once dominated the market have been joined by institutional investors. This has led to a standardisation of how to measure the change being financed.
“In 2010, most [investors] used their own systems to track impact outcomes,” Amit Bouri, GIIN chief executive, wrote this year. “Now, almost all are aligning around a core group of [impact measurement and management] systems.”[…]
In some cases impact measurement can be straightforward, says Catherine Banat, director of US responsible investing at RBC Global Asset Management, which has launched a $100m fixed income fund to provide loans to home buyers and small businesses in California.
She says that fixed income allows excellent visibility for investors. “We can tell every investor every loan that comprises every security that is in their portfolio . . . you can see who gets the dollars and what they are for,” says Ms Banat.[…]
“It’s very easy to talk about your positive impact . . . but there’s not as much appetite for reporting your negative impact,” says Allison Spector, the director of sustainability, real assets and private markets at Nuveen, the US investment manager. “But we believe all investments have the potential for both positive and negative impact and increasingly [strive] to be able to reflect that in both what we measure and what we report.”[…]
Fuente: Financial Times