With impact investing becoming more crucial than ever, increasingly retirement funds want to add these investments to their portfolios. A good place to start is to evaluate their existing exposure to impactful themes that are crucial to local and global development. But how?

To assist funds and investors, RisCura has launched an impact exposure tool for institutional investors that allow them to understand how impactful their investments are in relation to the developmental needs locally and globally.

“The core of what RisCura stands and works for can be summed up in the phrase “invest with care.” As such, impact investing is a critical focus for us, and we are engaging with it on many levels. Spurred on by our group-wide passion for a better future for retirees, we developed this tool for our institutional clients,” says Adam Bennot, senior associate for alternative investment services at RisCura.

Using the objectives of the National Development Plan (NDP), RisCura mapped these to the UN’s Sustainable Development Goals (SDGs) as a point of departure. We arrived at 10 specific themes, and one cross-sector category for investments that impact multiple themes.

Impact Themes

  • Affordable Housing
  • Inclusive Finance
  • Clean Energy
  • Natural Resources and Conservation
  • Health and Wellness
  • Infrastructure Development
  • Quality Education
  • Sustainable Agriculture
  • Water and Sanitation
  • Environmental Preservation

RisCura devised a scoring methodology whereby each instrument in a portfolio can be evaluated against the impact themes, and an overall impact score for a fund can be calculated. In essence, the final impact score is a function of the percentage of the total portfolio allocated to impact themes and the relative importance of those themes in the South African context.

The result is an impact exposure report that not only shows the impact of a portfolio but also points to what improvements can be made to ignite change.

Knowledge is power

Being properly equipped to make impactful investment decisions makes those decisions even more powerful. Impact investing is no longer a simple nice-to-have, rather it’s a tool we can use to futureproof our world. The retirement industry is working hard to improve the outcome for retirees to ensure they end up in a financial position that allows them a dignified retirement. But what if the environment they retire into to is not fit to live in?

The investment decisions we make today will massively affect tomorrow. To establish a reality check that reflects the true impact of retirement fund portfolios can encourage trustees to strive to achieve even more impact with their investment decisions.

To find out more about RisCura’s impact exposure report, get in touch with our investment experts here.

– Adam Bennot
Senior Associate, RisCura