There is a huge scope for professionals with knowledge of impact investments.

It is imperative for finance / investment / wealth management professionals to be thorough with impact investments for two reasons.

One; Impact Investors have Trillions of Dollars and is a growing field which represent a huge opportunity for job seekers.

Two; Regular investors & funds are waking up to the fact that even if Impact is not their priority, it will do them a lot of good to understand of their investments are making any impact and if so to what extent. Also the negative impacts would be monitored if they monitor their investments as per impact investment norms.

How big is the impact investment market?

The 2016 report of JP Morgan private bank states the AUM (assets under management) for sustainable investing as US $ 22.9 Trillion. A significant rise from US $ 18.3 Trillion as reported in 2014.

Almost every fund manager today tries to measure his investee companies in terms of sustainable investing and impact investments. Even f the fund is not dedicated to sustainable investing.  His is done for two reasons. One is to be able to report in case needed by government , regulatory bodies or societal pressure in terms of NGO’s etc. and Two to understand if they can float such a fund and raise further funds under this theme.

Why Investors allocate funds to sustainable investment

The growth of sustainable investing has enabled—and been driven by—a proliferation of different investment objectives, approaches and vehicles. Some investors are interested in strategies to better

manage risk and strengthen financial performance. Others want to use investing as a means to achieve social or environmental impact, in addition to generating financial returns.

Investors keen on Sustainable Investing have different approaches whilst investing

1. Exclusion of one or more factors which go against investor values
   • For example these investors may not want to invest in companies which do not meet environment, ecology, human resource minimum standards.
   • g. manufacturing companies suspect of child labour, or companies suspect of bad corporate governance.
   • Common examples are exclusion of tobacco, alcohol, defense, fossil fuel etc
2. ESG priority (environment/social/ governance)
   • These Investors would prefer to invest in companies where ESG is a priority and are reporting on these norms.
   • Investors may also have a preference to invest in companies having a high positive core on ESG norms.
3. Thematic
   • Investors in this category have a specific preference for themes like alternate energy, waste disposal, waste to energy, water, education, healthcare, and other environment or social themes.
4. Impact Investment
   • Investors in this category have a specific intention to generate generating positive, measurable social and/or environmental impact alongside a financial return
   • These investors invest with a specific target for impact returns.

Asset Classes under Sustainable Investing

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