Joint authors of this article is WHEB group partner and research director at Seb Beloe.
How to measure investors' intentions?How to ensure that the influence of the investment report and data reliability?
The world bank group members of the international finance corporation (IFC) had to estimate, in 2019, private equity fund management to perform influence investment assets totaled $405 billion, $205 billion of these have the confirmed the measure of the influence of underlying assets.Coupled with the developmental financial institution assets under management, mean to practice influence investment management assets total 2019 up to $2 trillion, $505 billion include the influence measure and report.
The risk of "clean" influence
The lack of clear definition, general standards and guidelines for investors caused some trouble.As the influence investment market matures, investors are starting to influence more seriously assessment report.The existence of a problem is the risk of "clean" influence, the traditional investment simply labeled influence investment, trying to take advantage of the relatively new asset classes any positive attributes, benefit from it.This practice may weaken and distort the market not only, still can blow to investor confidence, which hinder the development of the market.
2 degrees investment initiative found, for example, in the presentation is not interested in investment fund "influence" of retail investors, 48% said this is because they influence the project report data are sceptical.Influence the report method, therefore, be transparent and consistent, is the key to boost investor confidence.Investors need to have confidence in the influence of the project report data, can effectively find the opportunity, and accurate investment products.
The latest good practice
As investors more and more high to the requirement of transparency, the analysis about the influence and report guidelines and structure is in progress.Recent development framework, guidelines and standards, and further perfect the sure influence best practice work report.
In 2019, the international finance corporation released the influence management principles, to provide high levels of investment in the influential framework, already has more than 100 institutional investors to sign."Principle" contains nine principles, on the basis of the existing standards, tools and frameworks, including focusing on the influence measure rather than a process management program (IMP), as well as an indicator of public IRIS + 1.
In 2018, the United Nations principles for responsible investment organization (UN PRI) announced the influence investment market map, which lists according to the investment themes such as renewable energy method to recognize the influence investment company, with clear can be used to monitor the performance of commonly used key performance indicators (KPI).This recognition method based on the framework of the IFC, such as requiring a fund management company based on a systemic method to evaluate every investment expectations, but does not provide a specific method.
Green bond market is also a set of common standards of beneficiaries, such as the influence of the ICMA report unified framework, aims to report the influence of green bonds, in order to respond to the demands of investors for greater transparency.
The influence of the new champions league outbreak period
As new champions league the influence of the outbreak of the global economy continues to spread, becomes a new focus green economic recovery, investors are now pay more attention to have positive effects on social investment options, such as increasing employment, solve social injustice and help economic net to realize zero emissions, etc.This is enforced influence investment fund respond to these needs, and for the promise of transparency and the guarantee of reliability is the key to success.
The importance of independent evaluation
There is no doubt that green one of the reasons for the success of the bond market is made clear standards, and a separate approval certified institution can provide a second opinion.Should be conducive to promoting the development of similar influence the development of the investment market, because of the investment management is becoming more and more attention to seek independent certified.
Independent evaluation report influence method and the basic model, can enhance investor confidence in the data, improve the influence the integrity of the report.As a result, the IFC framework of principle is 9: "the manager a year should be publicly disclosed its influence management system on the principle of compliance, and to arrange for independent certified."
Encouragingly, this message has been implemented, we see the financial asset management companies and green product issuers to influence report to assist with proving service, the increasingly strong demand.We believe that this positive, persistent trend will be to create a healthy, energetic lay the foundation of the market.
The carbon trust recently entrusted by influence investment institutions WHEB Asset ManagementTo measure its impact on peer review, and accounting basic calculation results, to ensure that its influence the reliability of the data report.
WHEB has industry in the execution time longest listed shares influence investment strategy.Through entrust the carbon trust to measure its impact on peer review and check the calculation results, shows that the company continually improve influence report promise of transparency.
As more investors will influence, which is the core of the value orientation, we expect for a more rigorous and standardized measure and report the impact of demand will continue to grow.We are pleased to cooperate with WHEB promotion influence measure of good practice, also hope that more investors will influence on their report data independently certified, in order to improve the confidence of investors.
For more information
The climate change impact assessment and climate related financial information disclosure
- Managed by the Global Impact Investing Network (GIIN).
- Bachelet, Becchetti and Manfredonia (2019) The Green Bonds Premium Puzzle: The Role of Issuer Characteristics and Third Party Verification, Sustainability. The ADB (2018) The Role of Greenness Indicators in Green Bond Market Development: An Empirical Analysis, Asian Bond Monitor June 2018
