Impact investing in public equity funds
Impact investing in public equities relates to investing in publicly traded companies and funds that aim to generate financial returns and measurable social and environmental outcomes.
Distinct traits of an impact fund are reflected in strategy definition, portfolio selection processes, impact outcome measurement, reporting and monitoring, and engagement strategy and results. Differently from ESG funds, the approach of public equity impact funds goes beyond exclusion lists or sustainability ratings integration. Instead, this flows throughout the entire investment cycle, from the fund impact objectives, developed with intentionality, to the material engagement, the measurement frameworks, and the reporting of outcomes to ensure additionality and measurability.
Aligning with the definitions from the Center for Sustainable CSP Finance & Private Wealth at the University of Zurich, we focus and monitor Fund solutions where there is a change in underlying company impact caused by investment activities and capital allocation by the investor and not from the company impact induced on the world by the company activities[2].
According to our Impact Database, public equity impact funds make up 7.3 % of total funds tracked, comprehending all capsizes, large, medium and small. Presently, they account for 34% of the total capital committed. Climate, health services, renewable energy and water & sanitation are the sectors most targeted by public equity funds.
