AXA IM's Matt Christensen reflects on the 2019 Global Impact Investing Network (GIIN) conference
“Money has moved from the core of private markets to questions about how this can be done in other asset classes”
Last week, over 1,200 attendees converged into Amsterdam for the annual GIIN event. If we take attendance as a proxy for the interest in impact investing, it is in a significant growth phase as I remember the first GIIN that I attended being fewer than 100 people and that was only 4-5 years ago.
What’s going on?
I think the numbers reflect the rapid speed of change in expectations of asset managers. This change derives from both a shift from the demand side as well as regulation and compressing fees coming from passive asset management. Impact investing, even in these early years of establishing norms, begins to provide investors with an ability to answer growing client needs about the ‘behavior of their investing’. It’s not enough anymore to simply earn a risk/return for your client. It’s about how you are doing it.
Perhaps that was my biggest takeaway from this year’s GIIN event – how money has moved from the core of private markets to questions about how this can be done in other asset classes. There is no easy answer as the closest asset class beyond private equity to show a pathway is probably in green bonds, a small but growing portion of fixed income.
Nevertheless, the presence of public equity fund managers at the GIIN shows that this asset class will quickly be providing new approaches, and test cases for proof that impact investment can retain its characteristics in less obvious parts of investment management – certainly a starting point to test these new concepts will be in seeing how they meet the GIIN’s core characteristics of impact investing: https://thegiin.org/characteristics.
An even more rigorous approach would be to see how these newer strategies could fulfill the Operating Principles for Impact Management that have been designed with the leadership of the IFC (International Finance Corporation, a member of the World Bank Group) – AXA IM being one of the founding signatories.
Regarding this idea of proof of impact, my specific plenary panel on day two focused on a pressing topic – how to scale impact investing with integrity and the risks of impact washing. My fellow panelists were a great mix of development financial institutions and institutional investors. This diversity in panelist institutions shows the breadth of interest in impact investing and the challenge to meet the demands of integrity along the way so that we can convince investors that our products and our solutions will ultimately illustrate how capital flows are shifting to meet the Sustainable Development Goals.
There was much debate about the best means to move forward and I imagine there will be a whole new set of faces when we meet at the GIIN next year to see our progress. And my hope is that we will be that much further in the proof of concept of impact investing across asset classes.
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