02 May ASSET OWNERS: IS IT POSSIBLE TO HAVE AN IMPACT IN PUBLIC EQUITY MARKETS?
Meaghan Kilroy at Pensions & Investments reported last week from the Big Path Capital’s Impact Capitalism Summit in the US. The panelist argued that one of the challenges of adding public investments to an impact portfolio is the difficulty of measuring the generated social or environmental impact of those investments.
Speaking on a panel titled “How to Build a Diversified Impact Portfolio, Shuaib Siddiqui, Director of Impact Investing at the $1 billion Surdna Foundation based in New York said:
“One of the things we struggle with in terms of from a public equity portfolio or public debt portfolio is what is the impact actually from that? How do you quantify that? How do you think about that?”
Alan Snoddy, Managing Director at the Church Pension Fund (Episcopal) with $13.5 billion in AUM, agreed that measuring the impact of public market investments is difficult and that similarly to the Surdna Foundation, the Church Pension Fund’s investments tend to be weighted towards private investments.
The panel highlights the difficulty of describing investment in public companies as ‘impact investment’. A fund can screen out certain types of stocks like Oil & Gas, coal, tobacco and weapons etc. However, ultimately it is difficult to measure the impact of individual investments as publicly listed stocks are simply changing hands.