Impact Investing Principles for Pensions
What are the Impact Investing Principles for Pensions?

Many pensions schemes want to reduce negative impacts and risks like carbon emissions, biodiversity loss, poor governance and inequality that arise from and impact their portfolio. Going one step further, more and more pension funds are interested in investment opportunities that have a positive impact on the environment and society but which also secure a competitive financial return.

The Principles provide an accessible introduction to impact investing and the concrete steps pension schemes can take to pursue an impact investing strategy, as well as helpful further resources. They were designed, in consultation with leading practitioners and with input from key stakeholders (pension funds, investment consultants and managers as well as member associations), to address the growing need for best practice guidelines on how to set, implement, review and measure an impact strategy. The Principles represent a dynamic template given that impact investing is an evolving area, and they will be updated based on feedback from current Adopters and members of Pensions for Purpose.

Detailed information on the Principles and the work of the Impact Investing Institute can be found here.

In smmary, the Impact Investing Principles are:




How do I use the Principles?

Are you part of a pension fund team, a trustee of a pension fund or an independent adviser to a pension fund? 

Your pension fund can become an Adopter of the Principles and use them as a good governance framework to guide your investment process. You need to sign the commitment statement and provide a quote to use on why you decided to adopt the Principles. We will then complete an interview with you where we do all of the hard lifting to provide you with a case study, as for our current Adopters  We will then review this on an annual basis to understand the progress the pension fund is making.

Are you an investment consultant or fiduciary manager?

You can become an Adopter of the Principles and build them into the advice and management of assets on behalf of your clients, demonstrating that you are leading on this important agenda. You need to sign the commitment statement and provide a quote on why you decided to adopt the Principles. We conduct an annual evidence gathering exercise to understand what investment consultant and fiduciary manager Adopters are doing for their clients on impact.

Are you an organisation that would like to endorse the Principles?

You can become a Supporter. You need to sign the commitment statement  and provide a quote to use on why you decided to support the Principles. A key element of support is promoting the Principles and encouraging their adoption.

Resources 

 
Impact Investing Adopter Award 
 
Pension fund Adopters can submit their case studies into our annual Impact Investing Adopter Award with no further work required.

Our award winner in 2021 was South Yorkshire Pensions Authority. 



“The Impact Investing Principles have provided us with a solid foundation from which to build how we look at our impact and it is very gratifying to be recognised for our work in an area which is so important to what our scheme member want from their pension fund." - George Graham, Fund Director, South Yorkshire Pensions Authority

 

Find out more


To discover more about the Principles please contact us

Pension Scheme Adopters

Aon MasterTrust, The

Aon MasterTrust, The
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For us, Impact Investing is about combining the delivery of strong financial returns for our members whilst making a positive impact on the world around us. This is incredibly important as most of our members will be invested in The Aon MasterTrust for decades and thus focusing on investments that positively impact the world in years to come makes sense both financially and socially.

The Impact Investing Principles are a really useful framework. Particularly helpful is the way that the principles are straightforward, high-level and easily understood. It is much better to have something that is useable and widely adopted, than something that is daunting and rarely used. The Impact Investing Principles helped us with the thought process, rather than requiring lots of compliance level ‘box-ticking’.

Clwyd Pension Fund

Clwyd Pension Fund
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"I wanted to give my backing to the Impact Investing Principles for Pensions as a practical framework to encourage other funds to consider impact investing. This is not just about measuring impact or sustainability - this is sensible investing". Debbie Fielder, Deputy Investment Director

Collegia

Collegia
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We support the Impact Investing Principles for Pensions and commit to:

  1. seek investment advice on an impact investing approach for our pension fund;
  2. review environmental, social and governance impacts across our investment portfolio; and
  3. consider available impact investment strategies.

We will be able to demonstrate action in one or several of these areas within six months of adopting the Principles and will recommit on an annual basis with evidence for how the Principles have been used.

Environment Agency Pension Fund

Environment Agency Pension Fund
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Investing for impact not only delivers for the environment and society, but it delivers financial returns too. That has certainly been our experience since we set up our private market impact fund in 2014. We are really pleased to support The Impact Investing Principles for Pensions and share best practice across the industry.

London CIV

London CIV
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Over the past year, we’ve made great leaps towards our responsible investment milestones. Most notably we committed to net-zero greenhouse gas emissions by 2040, becoming the first Local Authority pension pool to do so. In line with this objective, we launched multiple products with an explicit environmental impact objective – to help drive down carbon emissions reductions in the real economy – alongside a financial return. By aligning with the Impact Investing Principles for Pensions, we can further demonstrate how we are taking action and deploying capital towards strategies that present dual or triple-bottom-line benefits. Joining the Impact Investing Adopters Forum also provides a unique opportunity to share best practice with peers. Ultimately this will help to ensure we deliver on our Client Funds investment and sustainability objectives.

Smart Pension Master Trust

Smart Pension Master Trust
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"We're excited to be on our impact investing journey. We have backed the Impact Investing Principles for Pensions as it gives us a really tangible framework to help us get to where we want to be, including generating competitive returns to improve member outcomes. Through practical guidance and support, it will help us be part of the solution to the global systemic issues we currently face."

South Yorkshire Pensions Authority

South Yorkshire Pensions Authority
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"Organisations with credibility are behind the Impact Investing Principles for Pensions . By supporting this we are acting in concert and creating collective action to address social and environmental impact risks and opportunities alongside a financial return." George Graham, Director

Surrey Pension Fund

Surrey Pension Fund
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"The Impact Investing Principles for Pensions are pitched at the right level as they are achievable. They provided us with the support to look at how we wanted to contribute to a sustainable transformation. We would like to see the Principles evolve and continue to push the industry". Neil Mason, Strategic Finance Manager

Investment Consultant and Fiduciary Manager Adopters

Aon

Barnett Waddingham

bfinance

bfinance
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There is a shift in the way investors are approaching responsible investing. ESG integration is fast becoming a norm; investors are increasingly wanting to go beyond and invest with impact. Asset owners wanting to allocate to impact funds face some distinct challenges, from education on “what impact they can have” to weeding out the impact washing that is still highly prevalent. At bfinance, we have been working closely with a range of institutional clients on addressing these challenges, including navigating their entry to the rapidly evolving product universes and expect investor demand to continue to grow in the coming years. The Impact Investing Principles, which we endorse, brings practicality to helping pensions schemes allocate their capital with people, planet and profit in mind.

Cardano

Cardano
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We support the Impact Investing Principles for Pensions and commit to:

  1. seek investment advice on an impact investing approach for our pension fund;
  2. review environmental, social and governance impacts across our investment portfolio; and
  3. consider available impact investment strategies.

We will be able to demonstrate action in one or several of these areas within six months of adopting the Principles and will recommit on an annual basis with evidence for how the Principles have been used.

Gordian Advice

ISIO

Kempen Capital Management

Kempen Capital Management
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Kempen was pleased to become an adopter of the Impact Investing Principles and to further develop our relationship with Pensions for Purpose. Not only are the Principles themselves important, they are common sense, good practice, and express how we at Kempen already think about impact specifically and investment more broadly: that it is worth doing, does not limit our capabilities or opportunities for our clients, and aligns our clients, managers and portfolios in an easily understood - and non-technical - way. It also builds naturally on the co-creation of our Global Impact Pool with our Dutch clients in 2018, and why we were pleased to include this as a case study with the Institute.

Redington

Redington
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The Principles ensure that we continue to advance and evolve our thinking on impact investing, making sure we get the topic on as many of our client's agendas as possible. By highlighting positive and negative impacts, we can bring impact alongside risk and return showing our clients this is an evolution of their existing investment approach.

Schroders Solutions

Schroders Solutions
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As a fiduciary manager, the way we direct capital not only shapes the financial returns we can deliver for our pension scheme clients and their members but also the impact we have on the world. The way we invest is changing, driven by a fundamental shift in how companies are being viewed and valued. Where once we considered only risk and return, we now assess a third dimension – impact. We believe that considering these three pillars together can help us assess an asset’s real value and make better investment decisions for our clients. This is why we fully endorse the Impact Investing Principles for Pensions.

XPS Investment

XPS Investment
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Responsible investing is core to our advice to clients as we believe it forms the basis of good investment decision making. Going further however, pension scheme trustees are increasingly looking to pursue positive impact whilst generating financial returns. Investing with the intention to contribute towards alleviating global social and environmental challenges is key to a future that members can retire into and we are keen to support pension schemes on this journey. We endorse and welcome the Impact Investing Principles for Pensions which set out a much-needed framework with practical steps in the evolving area of impact investing.

Supporters

Organisations that want to demonstrate endorsement of the Principles and which will actively promote the Principles among their members/network

Global Steering Group for Impact Investment, The (GSG)

Global Steering Group for Impact Investment, The (GSG)
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We support the Impact Investing Principles for Pensions and the market infrastructure around them, particularly by disseminating the principles internationally. We will work to encourage all our stakeholders, through the National Advisory Boards, to consider the impacts of their investments along with the opportunities that positive impact investments provide.

Institute and Faculty of Actuaries

Institute and Faculty of Actuaries
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"The Institute and Faculty of Actuaries supports the work and efforts of the Impact Investing Institute and the development of impact investing. We support the development of the Impact Investing Four Good Governance Principles for Pension Schemes and the market infrastructure around them, particularly the enhancement of the metrics and frameworks for impact measurement, management and reporting. We encourage actuaries to consider the impacts of their investments along with the opportunities that positive impact investments provide.”

Investment Consultants Sustainability Working Group

Investment Consultants Sustainability Working Group
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Andrew Lilley, Head of Responsible Investment Research at Isio and part of the ICSWG’s impact investing team, said: “Institutional interest in impact investing has increased dramatically, especially over recent years. However, we see a great diversity of approach in implementing impact frameworks as well as inconsistencies in impact reporting. The ICSWG supports initiatives such as the Impact Investing Principles for Pensions that aim to bring best practice guidelines and standardisation to impact investing.”

Maturity Institute OMINDEX®

Maturity Institute OMINDEX®
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The Impact Investing Principles for Pensions provide a crucial foundation for re-defining investment and corporate success. Where financial return, environmental outcomes, and human value can be fully integrated within a mutually inclusive, stakeholder value system. The Principles are completely aligned with our own aims and objectives and we are excited that OMINDEX® can play its part to support them; to help demonstrate how true, total stakeholder value should be at the heart of organisational health. We hope our contribution will help to re-shape a financial services sector that authentically embeds Impact as a core, common purpose.

The Investor Forum

The Investor Forum
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  • We support the Impact Investing Principles for Pensions and will use our voice to promote and amplify the importance of the principles to our Members.
  • We will encourage our Members to participate in, and report on, projects and engagement activity that can deliver impact.
  • We will demonstrate the impact of what we do each year in The Investor Forum Annual Review.

World Benchmarking Alliance

World Benchmarking Alliance
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We support the Impact Investing Principles for Pensions and the market infrastructure around them, particularly those in scope of our proposed financial system benchmark, including pension funds and asset managers. We will work to encourage these institutions to consider the impacts of their investments along with the opportunities that positive impact investments provide.

Latest
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