• Home
  • News
    • People moves
    • Africa
    • Asia
    • Australia
    • Canada
    • Caribbean
    • Domicile
    • Europe
    • Latin America
    • North America
    • Middle East
    • US
    • US
    • UK
  • Products
    • Funds
    • Pensions
    • Platforms
    • Insurance
    • Investments
    • Private Banking
    • Citizenship
    • Taxation
  • Fintech
  • Regulation
  • ESG
  • Expats
  • In Depth
  • Special Reports
  • Directory
  • Video
  • Advertise with us
  • Directory
  • Events
  • European Fund Selector
  • Newsletters
  • Follow us
    • Twitter
    • LinkedIn
    • Newsletters
  • Advertise with us
  • Directory
  • Events
    • Upcoming events
      event logo
      International Investment Nordic Forum 2021

      International Investment is delighted to announce the 2021 International Investment Nordic Forum which will take place on Tuesday March 9, at 9am (GMT). This curated virtual event will be broadcast live and will feature a series of fund manager interviews and presentations, as well as interviews with some of the Nordic regions top fund selectors.

      • Date: 09 Mar 2021
      • ONLINE, ONLINE
      View all events
  • European Fund Selector
International Investment
International Investment

Sponsored by

Sharing Alpha
  • Home
  • News
  • Products
  • Fintech
  • Regulation
  • ESG
  • Expats
  • In Depth
  • Special Reports
  • Video
  • Thematic

Survey finds nearly half of Nordic institutional investors invest in impact strategies

Survey finds nearly half of Nordic institutional investors invest in impact strategies
  • Ridhima Sharma
  • Ridhima Sharma
  • @ridhi02
  • 17 February 2020
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  

The focus on sustainability and the integration of environmental, social and governance (ESG) factors into investment processes is an increasingly important priority for investors globally. The most assertive form of this approach is ‘impact investing', whereby capital is allocated not just to avoid doing harm but to bring about positive changes. 

NN Investment Partners (NN IP), in association with consultancy Kirstein A/S, conducted a survey among Nordic institutional investors, who are often recognised for their advanced approaches towards responsible investing, to know to what extent are institutional investors adopting this approach? And how do they prefer to implement it?

Related articles

  • SDGs and private debt
  • Kempen launches impact investing FoF
  • MSCI launches tool to help investors align with UN Sustainable Development Goals
  • Invesco's Bonnie Saynay details key aspects of responsible investing approach

43% currently invest in such strategies, while another 22% plan to do so in the near future. Less than one fifth (19%) say they have no plans to invest in impact strategies while 16% are undecided.

‘Impact' is commonly measured with reference to the United Nations' 17 Sustainable Development Goals (SDGs), which are incorporated into its 2030 Agenda for Sustainable Development.

NN IP's investors are increasingly contemplating a shift from ESG-integrated investment solutions to an impact-based approach. These types of strategies are considered to invest for the greater good while helping to reduce longer term portfolio risk. They also offer access to sustainable growth companies (both listed and private) offering a more viable return stream. Although some investors think an ESG approach may cost them returns, 75% of those with established allocations to impact strategies believe that net returns will differ very little from traditional strategies. Still, on average, investors allocate only close to 5% of their total portfolio to impact strategies.

Edith Siermann, head of Fixed Income and Responsible Investing, NN Investment Partners said: "Our research shows that the appeal of impact investing is not limited to creating a better world. Improved risk and return and sustainable growth are also important, which explains why many investors have indicated to us that they want a broad range of impact products to choose from."

"We already see that the transparency of our approach to impact investing helps asset owners justify larger alloca-tions to impact in their core portfolio holdings. Applying stringent selection criteria and fundamentally analysing investment candidates are essential to ensuring that our investments deliver true impact and financial returns."

NN IP's research showed that investing to support the environment is top of the agenda for investors, with 97% describing it as being ‘very important', versus 81% and 73% who cite governance and social factors respectively. In terms of specific SDGs, Climate Action (Goal 13) proves to be the single most important SDG for all investors by some margin, followed by Goal 7, Affordable and Clean Energy and Goal 6, Clean Water and Sanitation - all of the top three focus on climate-related solutions.

In terms of listed equities, Nordic investors prefer global impact strategies that target multiple SDGs, ranking them an average 3.6 on a scale of one to five. Strategies focused on single themes such as water, healthcare, or energy efficiency rank lower at 2.67 and focused strategies that target a single SDG, such as low carbon funds, rank 2.56. The reasoning for this is often a preference for making a broad impact and difficulties in scaling up narrowly focused strategies. Nordic investors see green bonds as the epitome of fixed income impact investing, ranking them 3.69, followed by corporate bonds (3.34) and thematic funds (2.77).

Many investors perceive private assets to be the very nature of ‘impact', especially infrastructure, which is closely linked to a number of SDGs, while private equity managers are in a unique position to influence businesses to drive positive change. Ranked preferences for private market impact among Nordic investors, on a scale of one to five, included: private equity (3.78); private debt (3.58); infrastructure (3.25) and thematic funds (2.72).

Siermann continued: "Nordic institutions, especially those in Sweden, are leaders in the field of ESG integration, but investors across Europe and globally display a clear desire to improve. Impact investing is seen as an investment approach with a wide range of untapped opportunities to create sustainable, long-term investments."

"There are hurdles to be overcome, including the limited size of the investable universe, fee models that are out of synch with the going rate for impact strategies and the complexity of allocating to SDGs. But whereas the last decade has been about exclusion, the next 10 years will be about how to measure and increase impact. This is one of the pillars of our responsible investing approach because the better you can measure an impact, the better you can make one."

  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
  • Topics
  • Thematic

More on Thematic

BlackRock launches ultrashort bond ESG ETFs range

  • Passive
  • 19 March 2020
Nikko AM releases 2019 sustainability report

  • Thematic
  • 18 March 2020
World Water Day beckons for ESG investors - KBIGI

  • Thematic
  • 17 March 2020
BlackRock, JP Morgan, Fidelity top latest Broadridge Fund Brand 50 ranking

  • Equities
  • 16 March 2020
Lombard Odier unveils climate transition strategy

  • Thematic
  • 16 March 2020
Back to Top

Most read

Duff & Phelps opens Gibraltar office
Duff & Phelps opens Gibraltar office
Brexit deals hefty blow to City but industry is ready to fight back
Brexit deals hefty blow to City but industry is ready to fight back
Comment: Are cryptocurrencies the new gold?
Comment: Are cryptocurrencies the new gold?
FSCS warns industry of £1bn compensation bill
FSCS warns industry of £1bn compensation bill
Dubai regulator to develop cryptocurrency framework
Dubai regulator to develop cryptocurrency framework
  • Contact Us
  • Marketing solutions
  • About Incisive Media
  • Terms and conditions
  • Policies
  • Careers
  • Twitter
  • LinkedIn
  • Newsletters

© Incisive Business Media (IP) Limited, Published by Incisive Business Media Limited, New London House, 172 Drury Lane, London WC2B 5QR, registered in England and Wales with company registration numbers 09177174 & 09178013

Digital publisher of the year
Digital publisher of the year 2010, 2013, 2016 & 2017
Loading