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Impact Investors Focus On Climate Change, Racial Equity, Covid-19

Impact investors are putting their money where their mouths are. That’s according to a biennial survey of around 800 individual and institutional investors conducted by nonprofit impact investment firm Calvert Impact Capital. It found considerably more respondents reported having made impact investments than did two years ago.

Plus, while a focus on climate change investments continues to be a top driver for investors, so are racial equity-related options. And Covid has boosted overall interest in the sector to mitigate the effects of the pandemic.

“We’re seeing an increased in commitment that is turning into action,” says Justin Conway, Calvert’s vice president of investment partnerships.

More on the findings:

More investing. In 2020, while 70% of respondents said they planned to increase their impact investments, only 19% had made a recent investment. Two years later, fewer overall respondents (66%) indicated intentions to boost their impact investments, but 59% said they had recently made such investments. And more than 80% of institutions said they plan to do more.

Top areas of interest. More than half of respondents said they invested to address climate change over the past two years and 39% said they’d recently made impact investments aimed at addressing racial equity and justice. Over 20% said that the pandemic was a motivating factor in their getting involved in impact investing.

Big changes from 2018. In 2018, most respondents indicated that less than 5% of their total investment portfolios were allocated to impact investing.

Financial advisor activity. About 80% of financial advisors reported they have made at least one new investment on behalf of their clients to address climate change since 2020 and 74% have made at least one new investment on behalf of their clients to address racial equity since 2020.

Community Investment Notes provide a first step. More than half of respondents said that Calvert’s Community Investment Notes, fixed income securities that finance impact organizations, were their first impact investment. And of those investors, 62% said they made other impact investments after that initial investment.

There also was a marked increase in the number of respondents who added written comments about the investments they’d made. Most mentioned different notes, crowdfunding options, community development loan funds and some private equity, according to Caroline Shenoy, senior officer, investor relations at Calvert.

As for barriers to investing, they haven’t changed. As in earlier surveys, the biggest one was ease of access—or a lack thereof—to products.

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