Top 4 Themes in Impact Investing Right Now
Last week I went to the Total Impact Conference in Boston and noticed the same themes kept popping up in conversation, both on and off the stage. For photos from and highlights of event, click here.
1. How do we effectively measure impact?
Although this theme is one I've seen before, the discussion feels more mature now. There is less talk about whether to measure impact and more talk about how to do it effectively. The “how” continues to be challenging, both in public and private investments. Best practices are focusing on materiality, and looking at impact holistically to consider the various communities each investment affects and what positive impact looks like to those communities.
3. How do we reconcile the drive towards lower costs with the desire for more impact?
In the public equity mutual fund and ETF space, this year has seen a dramatic race to reduce fund management fees, including all the way to zero. In the ESG space, Vanguard recently rolled out two low cost ETFs. But does this reduction in management fees inhibit the ability for effective shareholder engagement, the main leverage place for driving change in public companies?
What I'm thinking about 1: Can an effective ESG strategy fit into the confines of an index fund?
What I'm thinking about 2: How can champions of shareholder engagement encourage large index owners, Like Vanguard, State Street, BlackRock to join in engagements as both signatories and with funding and resources?