In October, Emilie O’Neill from the Perennial Better Future team attended the Global Impact Investing Network (GIIN) Forum in Amsterdam.
The GIIN is the global champion of impact investing, dedicated to increasing its scale and effectiveness around the world. The annual GIIN Impact Forum is a gathering of over 1,600 attendees from 70 countries who come together to learn from speakers, participate in interactive sessions and network with impact investing leaders.
The Forum’s opening address was titled “Impact Investing in 2024: a Mission, a Movement, a Market”, where Amit Bouri (CEO and Co-Founder Global Impact Investing Network), announced that the impact investing market has reached $1.57 trillion, which represents a 21% CAGR since 2019.
The scale and growth of the impact market is impressive. However, we know that significantly more private capital is needed to address global sustainability challenges such as climate change, resource efficiency, global access to education, energy efficiency, and safe access to water.
The session on planetary boundaries with Johan Rockström – Director, Professor in Earth System Science: Potsdam Institute for Climate Impact Research, University of Potsdam and Marilia Bezerra – Chief Programmes Officer: IKEA Foundation provided discussion on the critical thresholds for increasing risks for humanity and ecosystems and the urgent actions needed to protect our Earth’s future.
There were also dedicated speakers on “Can Cutting Down Trees be Good for the Climate?” providing argument for the use of timber as a sustainable building input and regenerative farming practices in the session “Agriculture has Shaped our History, Now We Need to Shape its Future”.
The conference was upbeat on the outlook for the impact investing market. There was a sense of progression and catalysts that will continue to support the industry, including asset owners committing to a percentage of investable assets allocated to impact investing. This was discussed in the session “Shaping a Successful Future for Beneficiaries” by Prof. Dr. Alfred Slager – Non-Executive Board Member: ABP Pension Fund, Anders Stensbøl – Chief Investment Officer: Velliv, Pension & Livsforsikring A/S and Amy O’Brien – EVP, Global Head of Responsible Investing: Nuveen, a TIAA Company. They highlighted the role of Pension funds in shaping a sustainable future for beneficiaries extends beyond generating financial returns.
In addition, some asset managers called out that remuneration and carry have started to be linked beyond simply financial returns but also to the impact outcomes generated by the portfolio.
Company engagement was a key discussion point at the conference, and engagement in both the public and private markets can generate meaningful impact, and may even demonstrate additionality. It was noted that true impact comes from investing in global solutions, not just excluding the bad sectors. This was discussed in depth in the panel on “Engagement in Public Markets: Enhancing Return Potential and Impact”.
There were challenges that were addressed at the conference. The need for further policy support to de-risk impact investing, especially for earlier-stage investments was discussed as a challenge faced by impact investors, especially given that environmental impact objectives were the most in focus at the conference. Generating standardised impact KPIs for their investments to provide portfolio level impact measurement was another challenge discussed.
Overall, it appeared that positive catalysts will continue to support growth in the impact investing market. Whilst Perennial Better Future is not a dedicated impact strategy, it demonstrates features of impact investing, including in depth engagement with our portfolio companies, sustainability outcome reporting, and investing in our Better Future Enablers which are companies with more than 50% of their gross revenue from business operations that:
- are generating renewable energy, improving energy efficiency or seeking to reduce greenhouse gas emissions; or
- are involved in water treatment or remediation; or
- are focused on providing environmental services or otherwise focused on environmental outcomes; or
- involve technology or processes that enable businesses and/or individuals to reduce their resource use or improve the efficiency of their resource use (including by processing materials for recycling); or
- are providing nature-based technologies or solutions, providing products or services that improve biodiversity outcomes in existing business models or prevent the loss of biodiversity (including reducing pollution, improved farming practices, protecting marine life, plant life & natural ecosystems, improving forestry); or
- contribute to social welfare outcomes, including improving the safety, health or well-being of workers; or
- relate to health outcomes, including health products and health services; or
- relate to education services or outcomes (including without limitation childcare); or
- involve the leasing of properties to organisations that provide healthcare, education or childcare or for social housing purposes.
Find out more at https://perennial.net.au/perennial-partners/perennial-better-future/
