A detailed look at impact investing

More than ESG integration: investing with the goal of financial and social improvements

Investing with impact

Impact investing is an exciting step in the evolution of responsible investing. Impact is a type of sustainable investing, a way of making investment decisions which aim to deliver positive financial returns and a benefit to society at the same time.

While responsible investing means integrating environmental, social and governance (ESG) criteria, and excluding certain assets from portfolios, impact investing goes one step further. It covers a broad range of complex social and environmental objectives that aim to build a better future.

In simple terms, it’s about investing in prosperity for people and prosperity for the planet.

Being able to measure the benefits is critical – impact investing has clear, demonstrable objectives. At the same time the financial targets are not token, but aim to be competitive, market rate returns.

Our approach to impact investing

Investing with impact is an idea which has grown rapidly in recent years. The United Nations’ Sustainable Development Goals (SDGs), which were established in 2015 to address key global challenges including poverty, inequality, climate and health, have played a vital role in driving the impact agenda. There has been widespread adoption of the SDGs by a wide range of stakeholders – governments, businesses, financial institutions and not-for-profits – as a framework to assess unmet societal needs.

There are 17 SDGs, with clearly defined objectives, as well as 169 underlying targets to be met by 2030.

The roots of impact investing have been in venture capital and private equity. But over recent years the concept has evolved to include the rapidly growing green bonds market. As this investment approach moves further into the mainstream, there has been considerable debate in the asset management industry around how impact can be truly achieved by investing in publicly-listed equities and corporate bonds.

Responsible Investment

Our commitment to making changes within the buisness does not stop with corporate steps. Helping our employees to take a more conscious role in preventing climate change is also essential.

Our approach and offering

ESG at AXA Investment Managers is developed using input from teams across the business and we maintain a three-tiered approach to responsible and impact investing: ESG embedded, ESG integrated and sustainable investing

ESG research & publications

Empower investors with key insights on responsible investment trends, as we look at how investments could help foster prosperity for people and prosperity for the planet.

Why AXA Investment Managers for impact investing?

We have strong credentials in this area, having launched our first societal impact mandate in 1998. Its goal was to tackle unemployment, by investing in listed small and mid-cap companies, to create sustainable jobs in France. We now manage a variety of impact strategies, ranging from private equity investments to green and social bonds and listed equities and bonds, which look to provide solutions relating to issues such as healthcare, climate change and biodiversity.

Through impact investing, we want to enhance long-term returns, and this is achieved through the allocation of capital to take advantage of sustainability-related opportunities within large addressable markets. Alongside this, we aim to drive impact by leveraging our investor rights, to influence companies through engagement.

Insights

Responsible investment

Can ESG screening provide a buffer for fixed income investors?

The unprecedented monetary and fiscal stimulus put in place by governments and policymakers worldwide has supported bond markets for much of 2020 and 2021, but fixed income investors have faced chall ...

Responsible investment

The market takes up the challenge of the SFDR

The EU Sustainable Financial Disclosure Regulation (SFDR), which has just entered into force, is a watershed for sustainable finance.

Responsible investment

China green bonds: Seeking harmonisation in a sector that could boost the climate change fight

As part of AXA IM’s commitment to fighting climate change, we aim to be a leading investor in the green bond market.

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