Impact-linked Pay on the Rise

Linking performance on impact metrics to compensation is proving increasingly popular among impact investment managers, according to investment advisor ImpactAssets’ IA 50 2024 report. The annual database lists and analyses managers who meet its specific criteria for being an impact investor, and had 343 applications this year – a 15% growth from 2023. This year’s IA 50 lists 155 impact managers, with key highlights including an increase in impact-linked compensation mechanisms. Around 23% of listed managers said they had integrated impact results into their remuneration strategies, up from 16% in 2023. In addition, funds’ financial performance showed 43% of them targeted market returns, while 31% targeted above-market ones. Some 79% met their finance return target, and 21% surpassed it. Diversity also improved, with management teams being made up of 50% of women and/or people of colour overall. “The IA 50 has become a trusted resource in the industry, not only for its comprehensive listing, but also for its rigorous selection process managed by a diverse and expert review committee,” said Sandra Osborne Kartt, Chartered Financial Accountant and Deputy Chief Investment Officer at ImpactAssets Capital Partners. “The record number of applications this year reflects the growth and maturation of impact investing in the global financial landscape.”

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