The Investors Guide to Impact — A Guide to Moving the Needle
The Investor’s Guide to Impact is a tool for investors who want to have a positive impact on the world. Prepared by researchers of the Center for Sustainable Finance and Private Wealth at the University of Zurich, the guide provides concrete steps on how investors can effectively contribute to solving the world’s biggest problems — and how not.
Based on a review of academic literature, the guide supports investors in developing an evidence-based impact strategy for their investment portfolio. The key principle laid out in the guide is that investors who seek to have impact should focus on the change their investments create in the invested companies. The guide is a clear step beyond contemporary ESG-investing, which lays emphasis on investing in already “green” companies.
“There is a big difference between investing in sustainable companies, and investing in such a way that companies become more sustainable,” Julian Kölbel, author of the guide and CSP’s Head of Research elaborates.
In other words, impact goes beyond investing in the most responsible companies. Investor impact is the change that an investment induces in the social, governmental, and environmental impact of the invested companies.
The key recommendations for investors as per the guide are:
1. Invest in private markets in order to support green enterprises that need capital to grow
2. Actively engage with corporations in public markets and invest according to transparent ESG minimum standards that are applied by other investors too to create more leverage
3. Make noise about your investment choices in order to send public signals to influence political decision-making
“As investors are becoming sensitive to the world’s challenges, sustainable investing is booming. Now we need to focus on how investors can create real change and move beyond investments that merely feel good. Our guide helps investors to do so,” Florian Heeb, author of the report and CSP’s researcher explains.
The report provides investors with a tool to assess the weight of the impact mechanisms laid out in the guide and explores the strengths and weaknesses of these approaches.
“Investors can play a crucial role in helping to solve the global challenges we are facing. However, to unlock this potential we need to be clear about how investors can drive real change. This is the core of our work and this guide,” Falko Paetzold, Director of the Center for Sustainable Finance and Private Wealth concludes.
Access The Investor’s Guide to Impact here.
If you want to print the guide, try this version.
To learn more about CSP and our research, steer your way to www.csp.uzh.ch.
