"This approach is most effective when combined with engagement policies that are used to address concerns around specific issues, working towards a successful resolution.
"We use Robeco’s Sustainable Development Goal framework to assess company contributions to UN Sustainable Development Goals for integration into investment portfolios."
Such measurement, monitoring and reporting on impact allows for a direct and transparent link between the portfolio’s holdings and the investments' alignment to the 17 UN Sustainable Development Goals.
The UN SDGs comprise targets for 2030 to meet a range of human rights and climate protection goals - and the UN PRIs are linked to these.
Both enable companies to apply a standard, and framework to their investments, in order to identify whether and to what extent they are truly responsible and sustainable when it comes to human rights and climate protection.
Mcintosh-Whyte says: “If confusing messaging isn’t allowing people to do this, there is a risk that people begin to lose trust in its benefits and accuse funds of ‘greenwashing’.
"We believe clarity and transparency is crucial for sustainable funds to be successful."
The recent geopolitical uncertainties due to the war in Ukraine and the subsequent humanitarian disaster, have put energy and food security, safety and independence at the forefront of the policy agenda for global governments.
Innovations
There have been innovations in terms of saving energy, producing clean energy and diversifying energy suppliers in order to reduce dependence on Russian gas and oil.
Rouffiac says she believe this “will speed up the energy transition accelerating investments in renewable energy, which will serve as a tailwind for a number of investment themes in the clean energy, clean industry and saving energy space.
"In the UK, renewable energy investment companies will play a vital role in plugging the energy gap and to ensuring the UK reaches its 2050 net zero target.
Similarly in the US, focus on renewable energy spending aims to lower inflation over the long run and is expected to support the clean energy economy.
This bodes well with impact investing in areas that target several UN Sustainable Development Goals. Integrating forward-looking sustainability metrics in portfolios allows savers to invest in companies that provide solutions to tackle these challenges.
This approach allows the debate to move on from historical ESG opportunity/threat to what the sustainability focus and impact investing could deliver.
Together with an impact focused approach to investing in ESG as part of a multi-asset portfolio, there are a range of other approaches.
