Investing for Global Impact: A Power for Good 2020
Global private wealth holders set to almost
double impact investing allocation over next five years
- ♣ High net worth individuals, families, family offices, and foundations plan to increase their allocation to impact investing from 20 per cent of their portfolios in 2019 to 35 per cent by 2025.
- ♣ A quarter (27 per cent) of all investors expect to move to more than 50 per cent invested for impact within five years.
- ♣ Nine-in-10 (87 per cent) investors say climate change influences their investment choices, while over half (52 per cent) view climate change as the greatest threat to the world.
- ♣ Seven-in-10 (69 per cent) say COVID-19 has affected their views of investing and the economy, while 66 per cent say that it is likely to broaden their risk assessment to include more environmental, social, and governance (ESG) factors.
A new research report launched by Campden Wealth, Global Impact Solutions Today (GIST), and Barclays Private Bank reveals the growth in leading private wealth holders and family offices investing for positive social and environment impact, with the average portfolio allocation set to almost double, increasing from 20 per cent in 2019 to 35 per cent by 2025.
Investing for Global Impact: A Power for Good, now in its seventh year, provides unique insight into the attitudes and actions of a sample of the world’s wealthiest individuals, families, family offices, and their foundations when it comes to generating positive impact with their capital. As a leading global benchmark for those interested in impact investing and philanthropy, data for this study was collected from over 300 respondents from 41 countries, with an average net worth of $876 million and cumulative net worth estimated at $264 billion. Additionally, case studies with prominent investors and philanthropists also feature in the report.
Private wealth holders are increasingly engaging in impact investing
The proportion of the wealthy investors allocating more than 20 per cent of their portfolio to impact investing is expected to increase from 27 per cent to 39 per cent as soon as next year, and a quarter (27 per cent) are predicting to allocate more than 50 per cent within five years from now. As such, the average portfolio allocation to impact investing amongst these investors is expected to increase from 20 per cent in 2019 to 35 per cent by 2025.
Driving this uplift is the belief of two-in-five respondents (38 per cent) that they have a responsibility to make the world a better place. A quarter (24 per cent) believe that this approach will lead to better returns and risk profiles, and 26 per cent are looking to show that family wealth can create positive outcomes around the world.
Climate change considered the greatest threat to the world
The majority of investors (82 per cent) feel a responsibility to support global social and environmental initiatives. Specifically, just over half (52 per cent) believe that the long-term impacts of climate change pose the greatest threat to the world, and roughly four-in-five (83 per cent) are already concerned with the effects of climate change seen globally. These concerns mean that nine-in-10 (87 per cent) say that climate change plays a part in their investment choices.
While just over half (53 per cent) of these wealthy investors say Europe is leading the world in carbon neutral initiatives, 86 per cent want governments to do more, but at the same time, four-in-five (81 per cent) recognise the role of private capital in addressing climate change. With this in mind, two-in-five (39 per cent) would like to know the carbon footprint of their portfolio to inform their investing, while roughly one-in-five (19 per cent) already have this information.
Of those who do know their carbon footprint data, 13 per cent consider it as they make further investments and 9 per cent use it to actively reduce it towards a target, showing that more information around carbon emissions helps create greater positive impact.
COVID-19 is acting as a ‘wake-up call’ and driving interest in sustainable investing
COVID-19 has made individuals increasingly aware of the world around them, with seven-in-10 (69 per cent) respondents saying that it has affected their views of investing and the economy. Nearly half (49 per cent) believe that investing will not return to ‘normal’, even after the crisis subsides, and one-in-five (22 per cent) think that the impact investing market is about to ‘take off’.
In a sign that the implications for impact investing will be long lasting, two-thirds (66 per cent) say that they are likely to broaden their risk assessment to include more ESG factors, while 64 per cent insist that the crisis will force a deeper reconsideration of shareholder capitalism, and 69 per cent agree that how companies behave during the crisis will determine their investment attractiveness afterwards.
Healthcare ranked the second most popular impact sector, and a notable 84 per cent say that they plan to increase their investment to healthcare over the coming year, a proportion that outstrips all others.
Dr. Rebecca Gooch, Director of Research at Campden Wealth:
“Globally, over $30 trillion is now being invested sustainably and this trend towards responsible investment is catching on rapidly within the private wealth community. A notable proportion of wealth holders are now engaged and there are expectations, particularly since COVID-19, for a considerable hike in their investment over the coming years.
“Wealth holders see the challenging state of the world, and the risks and vulnerabilities both individuals and businesses face due to COVID-19 and climate change, and they want to act. Here is where smart investment and deep pockets can make a real difference in impact and ESG investment. For many, responsible investing is not only the ethical thing to do, but it is simply good business practice.”
Gamil de Chadarevian, Founder, Global Impact Solutions Today (GIST)
“There has never been a better time to fast-track investment for sustainable progress and smart innovation to generate profound impact for people and planet.
“We launched the report to catalyse and accelerate this transformation by serving as the leading knowledge platform to broaden understanding, identify trends, and provide a ‘peer-to-peer’ benchmark for investors in the field.”
Damian Payiatakis, Head of Sustainable and Impact Investing, Barclays Private Bank:
“Investors are being challenged to safely pilot their family’s lives and their portfolios through the disruptions of 2020, and it means they are having more discussions about the future - how their family’s wealth can reflect more of their values and the role they want to play in society.
“Families are considering the impact of their capital and then increasingly taking action, by allocating more towards solving our urgent global societal and environmental issues. We see that investors wanting to make this shift are looking for guidance to navigate the rapidly evolving field and to access high-quality opportunities that can deliver financially and with positive outcomes.”
For further comments and interviews, please contact:
Dr. Rebecca Gooch, email@example.com / +44 20 3763 2806
Global Impact Solutions Today
Samir de Chadarevian, firstname.lastname@example.org / +41 77 405 65 64
Barclays Private Bank
Melanie Hunt, email@example.com / +44 7385 364641
Campden Wealth is a family-owned, global membership organization providing education, research and networking opportunities to families of significant wealth, supporting their critical decisions, helping to achieve enduring success for their enterprises, family offices and preserving their family legacy.
The Campden Club is a private, qualified, invitation-only Members Club representing 1,400 multigenerational business owning families and family offices across 39 countries. The Club provides peer networking on a global scale, bespoke connectivity around aligned objectives, shared knowledge & best practices, co-investment opportunities with qualified liquid investors and support for the NXG. Campden Club Members also enjoy privileged access to generational education programs held in collaboration with leading global universities.
Campden Research supplies market insight on key sector issues for its client community and their advisors and suppliers. Through in-depth studies and comprehensive methodologies, Campden Research provides unique proprietary data and analysis based on primary sources.
Campden Wealth owns the Institute for Private Investors (IPI), the pre-eminent membership network for private investors in the United States founded in 1991. In 2015 Campden further enhanced its international reach with the establishment of Campden Family Connect PVT. Ltd., a joint venture with the Patni family in Mumbai.
GIST INITIATIVES Ltd. – Global Impact Solutions Today
GIST is a thought-leader; we bridge the gap between social & business, ideas & practice, and donors & grantees. We work with organizations to adapt business models and philanthropic approaches, to introduce and integrate new perspectives of social impact and to deliver advisory services. We define sustainability and impact as a transformational, innovative and holistic business model that provides a competitive edge, delivers healthy financial returns and mitigates future risks.
Philanthropy and impact investing suggest and imply different things to different people. As a think tank on this subject, we explore how family offices, foundations and organizations approach impact investing and philanthropy trends. GIST is the Founding Partner & Lead Sponsor of the annual Report “Investing for Global Impact – A Power for Good”, a leading knowledge platform to broaden understanding, identify trends and provide a unique peer-to-peer benchmark for individuals, families, family offices and foundations. GIST and its network support endeavours and charitable initiatives that have potential for long term, holistic sustainable impact.
GIST and its network support endeavours and charitable initiatives that have potential for long term, holistic sustainable impact.
At GIST we strictly follow ethical principles. We do not compromise our values, strong purpose, integrity and credibility.
Barclays is a British universal bank. We are diversified by business, by different types of customers and clients, and by geography. Our businesses include consumer banking and payments operations around the world, as well as a top-tier, full service, global corporate and investment bank, all of which are supported by our service company which provides technology, operations and functional services across the Group.