Faced with complex global issues like climate change the definition of impact investing needs to expand. Our Global ESG Equities Team argue the case for making a positive difference through investment in public equities.
Capital with purpose
Impact investing isn’t new, but it is not a concept that has historically been associated with investment in public equities. Why? Because there has been a preconception that it’s challenging to attribute positive impact to ‘non ringfenced’ capital invested via a public market. This view is beginning to shift, and we’d argue that it needs to change if we’re to meet the significant challenges our world faces.
Capital needs to be mobilised en masse
Complex global issues like climate change require multiple stakeholders to mobilise with governments, companies, individuals, and investors all having a role to play. The UN Sustainable Development Goals (SDGs) provide a roadmap to get the world on a more sustainable footing but their ambition and scope dictates that the definition of ‘impact investing’ needs to expand. There’s an estimated $2.5 trillion funding gap required to achieve the SDGs* – listed equities have the scale and reach to play a big role in plugging the shortfall.
Active ownership can drive meaningful impact
We have a long heritage in active ownership and believe that through engagement, we can make a positive difference. Indeed, over the years we have recorded numerous instances of positive change by utilising all the tools in our arsenal, from proactively conducting dialogue with management to exercising our voting rights or escalating via shareholder proposals.
As active equity investors targeting positive impact, it is important to operate with clear intent and within a robust and holistic framework. In doing so it is possible to harness the power of the capital we manage on behalf of our clients to precipitate and/or accelerate the pace of change.
Interested in learning more? In ‘Capital with purpose – Impact investing in listed equities’
We explore impact investing’s application within listed equities, the power of engagement and our approach that emphasises intentionality, engageability, contribution and measurability.
The views and approach outlined in this document apply only to funds and strategies with an explicit mandate to deliver ESG impact as well as positive investment performance which are managed by our Global ESG Equities Team operating through Columbia Threadneedle Management Limited. The team are now part of Columbia Threadneedle Investments which is the asset management business of Ameriprise Financial, Inc.