Impact investing set to grow ESG focus

Impact investing is set to grow to 1 per cent of global assets by 2019, and in conjunction with a focus on diversity and a broadening of environmental, social and governance (ESG) mandates, will drive the increased use of ESG strategies over the next decade, according to AXA Investment Managers. 

Global head of responsible investment for AXA IM Matt Christensen said the impact investing market was predicted to grow to US$500 billion by 2019 and could be viewed as a complement to the limits of traditional philanthropy and government programs. 

“The market is still young but its growth has resulted in initiatives that enhance its credibility such as the setting up of standards such as IRIS (Impact Reporting and Investment Standards) or labels such as GIIRS (Global Impact Investing Rating System),” he said. 

Christensen said asset classes under which ESG was considered had expanded, including its own use of ESG metrics for sovereign debt portfolios to assess countries’ creditworthiness, risks and opportunities - metrics which were currently used in the company’s responsible investment funds but that would be broadened to its mainstream funds. 

An increased focus on board diversity with regards to not just gender but also cultural diversity would further drive an increase in the use of ESG strategies, according to AXA IM. 

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