Implementing a strategy that allows funds to invest responsibly and defines what this means for different funds and investors will only become more commonplace in the future, with a growing number of funds acknowledging that investors are asking them if they can report on this element of their activities.
That was one of the conclusions of a panel held at the at the 2018 Cayman Alternative Investment Summit called ‘The future: Investing for Impact’, which considered this issue.
Chaired by Tania Carnegie, chief impact officer & leader, KPMG, she noted that a growing number of companies are recognizing the importance and value of an approach that has a higher purpose than merely seeking profits. “We have seen a shift with a lot more clients now asking whether or why they should do this but simply how,” she noted.
After Johann Koss, president, Waratah Impact, explained some of the benefits his company had seen from implementing this approach, Jack Inglis, CEO, Alternative Investment Management Association (AIMA), offered some of the findings of a recent survey contacted by AIMA on this issue, the full results of which will be released in the next few days.
He noted that when a cross section of mainly hedge fund managers were asked whether they had seen an increase in interest in their responsible investment activities, 71 percent of respondents in North America said they had, 50 percent of respondents in Europe, 53 percent in Europe and 41 percent in the UK.
“It was higher than we thought but the fact is that the trend is only moving in one direction and I dare say that it won’t be long before the response to that question would be 100 percent,” he said.
He noted that implementing a so-called responsible investment strategy was not without its challenges, however. The top three challenges investment managers revealed in this survey was: inadequate methodologies for the calculation of sustainable risks; the lack of relevant disclosers from companies; and excessive cots for the scale of the company.
Roxanne Joyal, CEO, ME to WE, explained how her company partners with companies to help them offer a more responsible product – but that in doing so most also see a sales uplift precisely because they have differentiated themselves from the competition. “Even though we are a social enterprise they treat us like any partner – there is brand engagement and they get a sales lift. We offer authenticity and content - consumers are increasingly savvy and this can help drive success.”
Abigail Noble, CEO, The Impact, added that more companies now understand that how they invest has consequences: positive and negative. “We can all do a better job of trying to do less that has a negative impact and more than has a positive. And there is also more evidence emerging that shows that businesses that operate in this way also perform better long term – for the pragmatists,” she said.
2018 Cayman Alternative Investment Summit, Alternative investments, Funds, Cayman Islands