Only 9% of family offices interviewed in a recent 2020 UBS survey indicated that they currently employ impact investing practices, while 14% stated that they plan to incorporate the social investment approach into their investment strategies in the next five years.[1] This is in stark contrast to exclusion-based investments which currently comprise the highest proportion of family office portfolio management strategies at 30%.[2]

One explanation for the low rate of adoption of impact investing stems from the difficulty in measuring impact, in fact, 66% of respondents indicated impact measurement as their biggest challenge. [3] In addition, two thirds of the family offices in Asia that AVPN has surveyed indicated that there is no formally designated staff member who oversees impact management in their organisation, despite an interest in impact management.

When we asked Mike McCreless, Head of Investor Collaboration at the Impact Management Project (IMP) and Katya Levitan-Reiner, Chief Operating Officer at single-donor investment firm Propel Capital how they would address these barriers, they offered four key steps to help investors to meaningfully integrate impact and financial data into investment decisions and portfolio management.

  • Step 1: Create an Impact Rating
  • Step 2: Select a Financial Valuation Metric
  • Step 3: Determine Implications for Future Investment
  • Step 4: Measure, Manage and Communicate Integrated Performance of Portfolio Investments

Read the full article about integrate impact and financial data by Loraine Choo at avpn.