Investors' Perspectives
The following key takeaways emerged from our conversations with a wide range of investors, from dedicated impact investors to mainstream investors on a sustainability journey:
- Strong motivation and clear intention form the cornerstone for positive impact contribution;
- Many investors have successfully integrated impact into their investment processes, from assessing potential investments to measuring and managing the impact outcomes;
- Most investors have reported financial returns at par or even above expected market returns, even though strategies and approaches differ;
- Some investors make decisions based on a market-led approach anchored on sectoral and thematic strategies, while others adopt a consumer-led approach and seek to solve specific pain points in the local context;
- Investors believe there is still a need for more impact capital, including patient capital and funds from both philanthropic and commercial actors;
- Beyond capital, the provision of active stewardship is seen as being essential to help companies scale up impact execution;
- Leveraging the momentum of ESG investments and sharing successful outcomes from impact investments can help to drive and secure buy-in from new investors and stakeholders, and lead to more capital flowing into Asia.
Companies' Perspectives
Similarly, we also gained valuable insights from the companies with whom we engaged while developing this report. They range from start-ups and early-stage growth companies, to international and regional corporations and MNCs. The following observations were made:
- Impact should be embedded at the most strategic level and not “bolted-on”, and driven by a well-defined impact strategy that clearly demonstrates intent and sets goals;
- Developing and articulating impact strategy is an evolutionary process and while established frameworks (e.g., UN SDGs) can help translate motivation to articulated goals as a start, contextualisation based on countries and sectors is a must;
- Even though ESG and UN SDGs are recognised by companies as useful frameworks to develop impact metrics and reporting mechanisms, clear impact metrics and a mechanism of reporting are still needed to measure and understand if companies are indeed making an impact and to what degree;
- Impact-oriented companies want peer comparables for impact outcomes, so that they can conduct comparable company analysis, learn from best practices, establish benchmarks, enhance success visibility, as well as gain recognition from different stakeholders that will further encourage their pursuit of impact.