On Tuesday, the New York-based Global Impact Investing Network (GIIN) released a set of steps for those in the financial services industry, including financial advisors and wealth managers, who want to become more involved in impact investing.
The release, called “Reshaping Financial Markets: Roadmap for the Future of Impact Investing,” establishes a vision for impact investing that would lead to inclusive, sustainable financial markets around the world.
The “road map” outlines six courses of action that need to be taken by different actors, including impact investors and advisors, to drive progress toward the socially and environmentally responsible future:
- Identity: Advisors must establish principles and standards for their practices to strengthen the identity of impact investing.
- Behavior: They must use shareholder leadership and updated finance theory to change social views on investor behavior and expectations about the responsibility of finance in society.
- Tools: They must create tools that support impact investing and allow practitioners to incorporate impact into their decisions.
- Products: Vendors must develop products suited to the needs and preferences of all investors.
- Education: Firms must use education to grow the pipeline of investment professionals and investment-ready enterprises.
- Policy: Regulators must encourage impact investment by removing barriers with policies and regulation.
In creating the road map, GIIN sought input from 350 impact investing practitioners and also turned to research about progress being made within the field.
The GIIN Roadmap asks financial advisors specifically to play a role by strengthening impact investing tools, products and techniques:
- Aligning their incentive structures with social and environmental impact as well as financial returns;
- Developing and supporting ratings systems that assess factors related to impact, and incorporating impact into existing indices and ratings; and
- Building analysis and allocation tools that integrate impact with risk and return.
GIIN hopes that collective action will help create a future where finance is essential to social and environmental progress, and where social and environmental factors are routinely incorporated into investment choices.
The report comes at the 10-year anniversary of the coining of the phrase “impact investing,” according to GIIN.
More information about the GIIN Roadmap can be found at https://roadmap.thegiin.org/