World’s wealthy investing more in companies that care

The amount of money going into investments that benefit society and the environment is rising by 18 per cent every year, and a club for the truly rich has members saying that returns are on a par with traditional investment.

A global investment club for the wealthy whose members aim to bring about social or environmental change as well as making a profit has grown by more than $1 billion in two years, according to a report.

Toniic said its members now have a combined $2.8 billion in so-called impact investments—capital placed with companies and organisations that can demonstrate they benefit society or the environment—up from $1.65 billion in 2016.

Members, who include families and foundations as well as wealthy individuals, said the industry was becoming more mainstream.

“Impact investing is not some minority sport by some hippies on the fringes,” James Perry, chief executive of the Panahpur charitable foundation, which has investments worth 4 million pounds ($5.34 million).

Clear dissatisfaction in the way the economy is going and emerging data around changing ecosystems have woken people up.

James Perry, chief executive, Panahpur

Toniic found 82 per cent of members who participated in its study had portfolios that met or exceeded their financial expectations according to the report, released on Thursday.

A majority said impact investments yielded returns on a par with traditional investments.

Perry cited Auticon, a British IT consultancy that helps integrate employees with autism into workplaces, as a successful impact investment in the Panahpur portfolio. Auticon’s shares rose in value recently after it expanded into other countries.

“Clear dissatisfaction in the way the economy is going and emerging data around changing ecosystems have woken people up. People are seeing they can’t carry on like they are,” he told the Thomson Reuters Foundation.

The amount of money going into impact investing is rising by about 18 per cent a year, according to the Global Impact Investing Network, whose 2017 survey found the market was worth at least $114 billion.

However Damian Payiatiakis, head of impact investing at Barclays, said the industry was still in its infancy.

“The industry has progressed from the stage of visionary innovators and is now entering one of early adopters, but the majority of investors aren’t yet aware of or being offered this opportunity,” he said.

($1 = 0.7496 pounds)

This story was published with permission from Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women’s rights, trafficking, property rights, climate change and resilience. Visit http://news.trust.org.

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