Impact Investing: destined for being neglected?

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Projektart und Laufzeit

FFF-Förderprojekt, Juli 2018 bis Juni 2020 (abgeschlossen)

Koordinator

Lehrstuhl für Betriebswirtschaftslehre, Bank- und Finanzmanagement

Forschungsschwerpunkt

Wealth Management

Forschungsgebiet/e

Financial Institutions

Beschreibung

With this project we tried to find out how to improve a specific form of sustainable investment strategies, impact investing, which is not comparable and by far more specific than ESG integration. Impact investing is characterized by three criteria: intention to create a specific social or environmental good; the social or environmental performance has to be measured; financial return should deliver at least redemption of the amount investment, plus a return up to market return. From all 7 sustainable investment strategies, impact investing is so important as it could contribute to speed up the transformation to a sustainable economy. But impact investing shows the lowest AuM of all 7 sustainable investment strategies worldwide and European AuM in impact investing are by far lower than in the US, although Europe is the market leader in sustainable investments worldwide.
The objectives were to reveal explanations, why impact investing is the mostly neglected form of sustainable investments. Additionally, we wanted to explain, why the AuM in impact investing in the US are much higher than in Europe. We could find answers to both objectives. In Menichetti (2019), we delivered insights into the connection between sustainable investment
strategies, preferences of supply side and demand side institutions, and the low speed of transformation. We revealed substantial cost disadvantages of impact investing compared to other sustainable investment strategies, disadvantages in measuring and comparability of impact, and the need for stronger standardization of impact investing's private debt and private equity structures. More efficient processes in private equity and private debt funds could be a solution to improve the niche position of impact investing. In Ababii and Menichetti (2020), we aimed to explore and compare relevant distinctions in preferences of impact investors in the US and Europe with a survey in part based on a choice based conjoint analysis, which proved that European institutional investors favour the impact dimension of investments more than their peers, while US investors give a much stronger importance to the financial feature of investments. Investors based in the United States proved to be more committed to impact investing than their European peers in terms of types of investments they make, percentage of total funds directed to impact investments, and overall period of engagement and activity in the impact investing sphere.
To summarize, we approached the problem of low AuM in impact investing from two sides. We analyzed the value chain of impact investing, and also compared impact investors preferences across regions, which showed us that they can be different. More research on how to guide impact investing out of the niche position is necessary. We see current priorities in improving the value chain in creating impact investing financial products (from original impact project to investable opportunities for institutional and retail investors) with substantially reduced costs. A second point is, that like in ESG integration, a handsome method for measurement and compa rability of impact is desperately needed

Schlagworte

Attraktivität von Impact Investing, Investorpräferenz bei Nachhaltigem Anlegen, Nachhaltiges Anlegen, ESG Anlagen, Gesellschaftlich verantwortliches Anlegen

Förderer

  • Forschungsförderungsfonds der Universität Liechtenstein