There is widespread investor appetite for social impact investing, but more is needed to do to promote ESG credentials and provide proof points, according to a group of experts.
Addleshaw Goddard was proud to sponsor the first Impact Investing and ESG conference on Thursday 15th August. A full day of webinars and networking around social investing connected leaders from housing, placemaking and infrastructure with investors and finance professionals to explore the global movement towards social and sustainable credentials and the opportunities for collaboration for social benefit.
The findings were that investors are keen to be in this space, with widespread evidence of a massive increase in interest. Successive speakers noted there had been a 520% increase in the social bond market, and almost half (46.9%) of issuers saying that ESG credentials had been a key focus of marketing to investors and they believed it had made a substantial difference.
Other speakers welcomed the fact that ESG credentials were no longer a "nice-to-have" but were becoming essential when attracting capital.
However, when exploring what was holding the market back, delegates noted that concerns over 'greenwashing' and 'rainbow-washing' and a lack of a common language and comparable metrics could be putting investors off.
Lee Shankland, head of Social, Sustainable and Green Finance at Addleshaw Goddard, said: "If we are going to address our most pressing social and environmental problems we need more investors becoming involved in impact investing. Whether it's stewarding the environment, solving desperate social problems around housing, education or infrastructure, or increasing access to finance, we need investors who want to do more than just make a return – they want to help drive change.
"The good news is that we are seeing hard evidence of widespread appetite for sustainability, sustainable finance, and incorporating ESG credentials into assessment of investment opportunities. And that money is changing lives and changing society.
"However, to grow this sector we need to ask what is putting people off, and the answer seems to be a lack of clarity over how much difference these investments are making and confusions over comparability.
"So this is heartening news for the sector, but we want to do more, and the message is that to achieve that we need better ways to demonstrate how and why this works."