Focus on impact investing to grow in 2023

Oksana Patron

14 February 2023

With a growing role of intentionality of investments and impact investing in the coming months, investors will also focus more on the role of public equities in generating impact in 2023, according to Martin Currie.

The manager said it would expect a ‘further evolution’ in stewardship and sustainability as well and  an increased focus on real-world impact, with climate change remaining a key issue this year.

“Climate will remain a key issue this year with an increased sense of urgency for action as the window for limiting climate change rapidly closes,” David Sheasby, head of stewardship, sustainability and impact at Martin Currie, said.

“We see an enhanced focus from regulators (e.g., emissions reporting and, in some cases, mandatory reporting through the Task Force on Climate Related Financial Disclosures) and investors through the potential expansion of collaborative engagements (e.g., Climate Action 100+),”

The other topics that were expected to have increased prominence across stewardship this year would be human rights, social rights and inequality.

According to Sheasby, in 2023 asset managers would be also asked to demonstrate their authenticity in managing sustainability and stewardship risks on behalf of investors.

“In the United Kingdom, we will see the emergence of the Sustainability Disclosure Regulation (SDR), which aims to tackle greenwashing and will set a very high bar for products to be called sustainable,” he said.

“In Europe, we expect continued tightening of regulation around how funds are categorized.

“Finally, in the United States, we should see the next stage of the emerging naming and disclosures regime on environmental, social and governance-labeled products. These developments will be critical for asset managers to effectively deliver the products and the outcomes that investors seek.”