“It’s not up to us to save the world.” This was the response I received from a trustee of one of the UK’s largest pension schemes recently to my pitch for impact investment.
The reaction was familiar. The paucity of data showing that you can “do well by doing good” makes it easy for schemes to ignore commentators who insist upon it. Yet for all the myths that have grown up discouraging this type of investing, institutional investors who avoid impact are missing out.
Impact investment — investment which delivers a social or environmental benefit — comes in many shapes and forms. It does not describe attempts to avoid harm, for example by divesting from weapons manufacturers or fossil fuel producers. Instead, it takes a more active stance, seeking investments which deliver benefits and contribute to the solutions we as a society want, whether in renewable energy, social housing or clean water, as well as delivering a financial return.