Report indicates US impact investment potential

Leading US social and environmental investment firm Sonen Capital has launched a new report which suggests that impact investment can outperform traditional asset class strategies.

The report, Evolution of an Impact Portfolio: From Implementation to Results, was launched by Sonen Capital in partnership with the KL Felicitas Foundation (KLF) on Monday, coinciding with the UK’s National Ethical Investment Week.

It analyses asset performances over a seven year period and demonstrates that impact investment can compete with, and at times outperform, traditional investment strategies.

It also suggests that it is likely that the impact investment sector has a significantly larger absorptive capacity, the ability to respond to environmental and economic trends.

Raúl Pomares, Sonen Capital Senior Managing Director, said, “We are extremely excited to share this report with the broader financial services industry in the hopes of discrediting the myth that investing for positive social and environmental outcomes requires a financial sacrifice”.

He added, “In the spirit of KLF’s mission, the Foundation’s hope is that others can learn from this experience and use these lessons to inspire them to action in mobilizing their assets to align with their values and address the world’s challenges, without necessarily a trade off in return.”

Although a relatively new concept, impact investment, or investing for social and environmental benefits as well as solid returns, has proved successful in the UK.

It was announced this week that ethical building society Ecology has reached a major milestone, seeing asset growth of £10m in the past nine months. Ecology says this is due to the attractiveness of “transparent savings”.

Further reading:

‘Transparent savings’ help Ecology break £120m asset barrier

National Ethical Investment Week around the world

‘George’ proves you don’t have to sacrifice values to get healthy investment returns

The sustainable investment tipping point is now

The Guide to National Ethical Investment Week 2013