Impact Investing, Fiduciary Duty “Fully Aligned”

Pension fund advisor Pensions for Purpose’s new research paper has “conclusively” shown impact investing and fiduciary duty are not mutually exclusive, with pension funds able to achieve impact objectives without sacrificing financial returns. The research paper showcases that UK pension funds engaging with impact investing have successfully aligned financial returns with positive social and environmental outcomes, stressing that impact investing and fiduciary duty are “fully aligned”. Pensions for Purpose said the study “dispels the myth” that impact investments “necessitate a trade-off with financial returns”. The research encompasses data from 17 asset managers that manage £18.6 billion (US$23.6 billion) in impact assets, as well as conducting interviews with six UK pension funds and four investment consultants for qualitative analysis to supplement performance data findings. The pension funds surveyed and already allocating resources to impact investments, have committed between 1% and 25% of their portfolios to such solutions. Karen Shackleton, Chair and Founder of Pension for Purpose, said: “The findings validate the compatibility of impact investing with financial performance goals which could have far-reaching consequences on future institutional investments. This research paper also serves as a valuable resource for pension funds contemplating impact investing strategies and shows the potential of these investments to contribute positively to society and the environment while meeting fiduciary obligations.”

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