Challenge
How can a fund point out its positive impact to investors?
As countries across the globe seek to transition to Net Zero, there is a clear focus on building sustainable economies.
With an estimated market size of $715 billion and growing investor demand, impact investing helps fund this transition. Yet, risks of impact washing could hinder capital flow. As such, financial institutions need to be more transparent about the real impact, investments are making. Through robust and transparent reporting, the industry can build trust in these investments and encourage capital to flow into a sustainable economy.
Recognising this opportunity, WHEB Asset Management had already set up a dedicated tool with which investors could calculate the social and environmental impact of its multi-thematic sustainability fund. But to ensure its process was top of the line, WHEB sought an independent review of its impact measurement approach.
Solution
Creating transparency and consistency across WHEB’s impact reporting
Our experience in impact methodologies, alongside our understanding of data quality, placed us in a good position to review WHEB’s impact model.
To strengthen the integrity of any impact claims, it’s not just about sharing as much impact data as possible; it’s also about data quality. Since WHEB looked to hone its impact reporting, we helped the company address one of the critical blockers financial institutions face in impact reporting: their reliance on receiving this data from portfolio companies. Together with WHEB’s sustainability team, we:
Reviewed WHEB’s impact reporting method against industry best practices.
Modified its impact data to ensure impact credibility.
Standardised data collection methods and identified improvements to provide high-quality and consistent reporting.
Impact
Adding an extra layer of integrity to impact data
Financial institutions have an opportunity to build credibility in their impact models, which will be indispensable if the industry wants to fund the solutions for climate mitigation and adaptation. This review allowed WHEB to back its commitment to sharing transparent impact data and be assured in its current approach. This project has given WHEB's reporting an extra level of credibility, so it can:
Reassure investors of the validity behind WHEB’s impact claims, building trust in WHEB’s impact reporting.
Facilitate greater engagement with portfolio companies and improve impact data.
Increase the integrity of the WHEB Sustainability Fund.
The Carbon Trust has been a leader in codifying best practices in impact reporting. Its non-biased stamp of approval gives us that extra layer of credibility as we show our clients the positive impact on society and the planet that is associated with their investments.
