New report from Toniic provides evidence that investors are going farther, faster and deeper into impact, while meeting their targeted financial and impact returns
100% impact portfolios are getting easier to build, the pioneers behind them are accelerating their shift to deeper impact, and investors are meeting their goals for both financial and impact returns, reveals a new Toniic Institute report released in late May 2018.
Toniic, the global action community for impact investors, is running a longitudinal study of portfolios in its 100% Impact Network. T100: Powered Ascent, the second report tracking these portfolios, compiles data from 76 private portfolios totaling $2.8 billion in committed capital. That’s a nearly 50% increase in participation compared with the 2016 Launch report, which surveyed 51 portfolios representing a total of $1.65 billion in committed capital.
T100: Powered Ascent also maps participants’ investment themes to the United Nations Sustainable Development Goals, providing the first look at how deep impact portfolios are addressing the SDGs.
The T100 study includes family offices, foundations and high-net-worth individuals committed to fully investing their portfolios for social and environmental impact. T100 is the first publicly available study to deliver detailed insights into the portfolios of a large group of private impact investors.
Impact investors are going farther, faster.
• On average, the portfolios in the Powered Ascent report are 75% invested for impact.
• 41% of portfolios are completely or almost completely (90% or more) invested in impact, compared with 33% in the Launch report.
• Impact allocations in the 42 portfolios included in both the Launch and current reports have increased an average of 9%.
Investors are meeting financial goals while deepening impact performance.
• 82% of T100 participants say their impact portfolios have met or exceeded their financial expectations.
• A majority believe that impact investments yield returns on par with traditional investments, whether they are held for the short term (1–3 years) or the long term (over 7 years).
• T100 participants tune their financial and impact return expectations to their particular goals and constraints. While 73% target commercial returns at the portfolio level, 85% make at least some sub-commercial investments to achieve deeper impact.
• 82% of respondents are actively coordinating their philanthropy with their impact investment strategy to support innovative solutions to big challenges.
A maturing impact marketplace is enabling depth, diversification and measurement.
• T100 participants continue to move a greater portion of their portfolios into deep impact (thematic) investments: the aggregated portfolios are on average 40% allocated to thematic investments.
• Participant portfolios are highly diversified across the spectrum of asset classes and returns. While finding deep-impact public equities, hedge fund and cash-equivalent options remains challenging, many investors have made progress in these asset classes as well as in real assets.
• The portion of respondents engaged in measuring the impact of their investments has jumped since the Launch report, from 38% to 60%. 98% want to be measuring by 2020.
100% Impact is the New Standard
“When the term impact investing was coined 10 years ago, it typically meant early-stage investments in social enterprises,” said Adam Bendell, CEO of Toniic. “This report reinforces that the state of the art in impact investing is a portfolio approach, in which investors seek positive impact in all asset classes across a portfolio. It also shows the increasing discernment of these investors in balancing impact and financial goals in different parts of their portfolios.”
Lisa Kleissner, co-founder of Toniic and the 100% Impact Network and editor-in-chief of the report, adds, “I think we all have a heightened sense of urgency and responsibility, which is leading many impact investors to invest across a spectrum of newly defined risk and return parameters, leveraging different types of capital with different return expectations in order to achieve more challenging impact targets.”
Toniic is sharing anonymized data from the study with a consortium of select universities under the leadership of the Center for Sustainable Finance and Private Wealth at the University of Zurich to enable academic research on impact investors’ behavior. The report includes some early results and related academic research, as well as a comparison to Global Impact Investing Network research findings.
T100: Powered Ascent is part of the broader T100 Project, which includes periodic reports, videos and podcasts, as well as the Toniic Directory (https://www.toniic.com/toniicd), a searchable online catalog of over 1,700 impact investments across all asset classes, sourced from the portfolios of 100% Impact Network participants, other Toniic members and other impact investing organizations.
The T100: Powered Ascent report is available for download at – www.toniic.com/T100 . Previous reports from the T100 Project include:
T100: Launch – Insights From the Frontier of Impact Investing (2016) and T100: Insights from Impact Advisors and Consultants (2017) can both be found on the Toniic website at- www.toniic.com
About Toniic and the 100% Impact Network
Toniic is the global action community for impact investors. Its nearly 200 members from over 20 countries share a vision of a global financial system creating positive social and environmental impact. More than half of Toniic members are also members of the Toniic 100% Impact Network. These investors have committed to moving an entire investment portfolio into 100% impact investments within about five years. Current member portfolios total about $6 billion in committed capital.