bfinance has published its biennial global asset owner survey, which reveals that 27% of investors are engaged in impact strategies and a further 26% are planning to enter the space.
London-based independent global investment consultancy bfinance has published its latest biennial global asset owner survey, which reveals the investment preferences and future priorities of 311 senior investors. It found that 27% of investors are engaged in impact strategies and a further 26% are planning to enter the space.
The survey, which was conducted between late September and mid-October 2024 and collates data from investors in 39 countries across six continents with a combined assets under management (AUM) of more than $7trn (€6.7trn), also found that 24% of investors planned to increase their exposure to impact strategies with just 2% looking to decrease their exposure.
Duncan Higgs, managing director and head of portfolio solutions at bfinance, told Impact Investor that investor awareness of impact investing was also driving increased capital commitments and broader allocations across multiple asset classes.
“Those initially focused on single asset class impact strategies are now diversifying,” he said, adding that the growth in private market investment in general – with 53% of investors planning to increase exposure to private markets over the next 18 months – was providing an additional boost to impact investing.
“The rise of private markets in portfolios is accelerating this shift, with investors recognising the power of asset managers to create meaningful impact through investment decisions and engagement strategies.”
Of those who responded to the survey it is estimated that roughly 40% were pension funds, 21% insurers, 8% foundations, endowments and sovereign wealth funds, 7% family offices and 7% wealth managers. The remaining were largely comprised of a combination of other types of investors, the details of which were not provided. The survey also analysed investor interest across other asset classes as well as a number themes, such as investor attitudes to risk and resilience.
Slow pace of adoption
The survey found that despite the growing interest in impact investing, the pace of adoption has been slow with the percentage of investors investing for impact increasing by just two percentage points to 27% from 25% in 2022.
Allocations to and interest in impact investment also differs between different investor types. For example, closer analysis of family offices revealed that they are considerably less likely to be invested in or look to invest in impact compared to the broader investor peer group. Nearly 30% of family offices are either currently investing in impact or intend to invest in the future, compared with around 50% of all respondents.
Higgs also pinpointed the growing interest in impact from foundations and endowments.
“We’re seeing strong interest from a diverse range of investors, including foundations and endowments seeking to align their investments with impact, often allocating to themes directly tied to their missions. We have experience supporting these investors, as well as public and private sector pension funds and insurers, in integrating impact considerations into their portfolios.”
Biodiversity and net zero
The survey also looked at specific areas within the broader category of ESG and impact, including investment in nature-focused assets, which looks set to increase from 12% to 36% if those who are planning to invest (24%), do so in the near future.
In other areas, the increase in the proportion of investors has been more muted. This includes those targeting net zero in their portfolios, which rose to 28% from 24% in 2022 or those reducing portfolio carbon emissions, which rose to 37% from 32% in 2022.
The survey also asked investors about their measurement practices, with those measuring portfolio carbon emissions rising to 47% from 41% in 2022 and those measuring other impacts beyond carbon rising to 30% from 24% in 2022.
ESG integration
Though ESG continues to come under pressure in the US, Higgs said that allocations to impact assets have gradually increased, despite varying sentiments around ESG. However, he said that impact could not be separated from ESG and that investors could not ignore it.
“While robust ESG practices can exist without impact, true impact investing cannot ignore ESG. The two are interconnected, with overlap often referred to as ‘ESG impact’. However, ESG serves as the foundation, while impact builds on it with intentional outcomes.”
The survey found that 65% of survey respondents integrated ESG into their investment process and a further 15% planned to do so.
