In a world facing challenges related to a changing climate and stark social inequalities, the concept of impact investing is compelling, powerful and frequently misunderstood. As a field of practice, impact investing builds on the long history of social investing and is rapidly evolving with an infusion of new ideas and participants.
CalPERS Adopts Environmental, Social, And Governance Strategic Plan - Five-Year Plan Identifies Six Strategic Initiatives And Key Performance Indicators
August 15th, 2016
The California Public Employees' Retirement System (CalPERS) Board of Administration today adopted the Environmental, Social, and Governance (ESG) 5-Year Strategic Plan (PDF), a six -point plan that is the next evolution of CalPERS' work on sustainable investing and the Global Governance program.
- Somehow ESG has yet to emerge as a fundamental driver of value. If the CFA Institute 2015 member survey on ESG is any guide, downside protection and investor mindset — not alpha — have been the key motivators of interest in ESG. It isn’t a surprise that the world’s biggest active funds have relatively poor ESG rankings. While this could very well change, given the current lack of interest in ESG factors, any shift would likely result from end investor demand rather than a systematic investing approach.
- Impact investing has largely been driven by wealthy individuals and foundations. It’s time for institutions to step up.