Myth 4 – You can’t measure impact
Admittedly, measuring impact is not as black-and-white as measuring financial returns. But that does not mean it isn’t possible to do in a meaningful way.
The UN Sustainable Development Goals (SDGs), which articulate the world’s most pressing environmental and societal challenges, are a useful – and universal – reference point for impact investors. Since these are, arguably, the issues that matter most for people and the planet, companies that contribute towards achieving them can be judged to have a positive impact.
To gauge the extent of this impact, we can determine key indicators of performance that align to a specific SDG. These will be relevant to the activities of a business. So, for instance, we might measure the impact of a renewable energy company in terms of carbon emissions saved. By measuring performance over time, we can gauge a company’s progress towards realising the SDGs.
Myth 5 – You can’t make a difference
When it comes to investing in listed company shares, the difference we make through our investment – known as the “additionality” – can be understood by considering the impact made by the company we invest in.
To evidence additionality, we might ask how the world would be different if that particular company did not exist and consider if it has some technological know-how or impact footprint that would be hard for a new company to replicate. As shareholders owning a percentage of the company, you can play a role in delivering that positive impact.
While we support the UN SDGs, we are not associated with the UN and our funds are not endorsed by them.
Important information
The views expressed here should not be taken as a recommendation, advice or forecast.
The value and income from any fund’s assets will go down as well as up. This will cause the value of your investment to fall as well as rise. There is no guarantee that any fund will achieve its objective and you may get back less than you originally invested.
For financial advisers only. Not for onward distribution. No other persons should rely on any information contained within. This financial promotion is issued by M&G Securities Limited which is authorised and regulated by the Financial Conduct Authority in the UK and provides ISAs and other investment products. The company’s registered office is 10 Fenchurch Avenue, London EC3M 5AG. Registered in England and Wales. Registered Number 90776.
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