The dynamic world of sustainable and impact investing in family offices has been garnering global attention. With an increasing number of successful brands looking for private client and family advisory services, it’s imperative to delve into sustainable and impact investing strategies.
These perspectives elucidate how family offices can capitalize on their financial assets to drive positive change in the world as they stride ahead to their financial goals.
1. The Guiding Light of Family Values Rather Than Terminology
It’s crucial to consider the scope of aligning investment strategies with the respective family values. The wide array of terms and options can be overwhelming in the ever-evolving environment of impact and sustainability investing.
Head of Sustainable and Impact Investing at Barclays, Damian Payiatakis, focused on the need to explain the intentions behind both financial returns and societal impact. The path to ethically sound investments becomes clearer when you start with the shared values of your family.
This approach calls for organizing workshops and facilitated conversations. During these discussions, the shared priorities can be identified. This largely establishes the foundation on which family offices make crucial investment decisions.
2. Integrating ESGs Into The Mainstream
There’s no denying that the investment paradigm has undergone a significant seismic shift. Currently, environmental, social, and governance (ESG) considerations are no longer optional. Rather, they have evolved as fundamental aspects of investment decisions.
Notably, traditional investors are recognizing the true value of incorporating ESG aspects into their investment strategies. Statistics reveal that a sizable 72% of these offices consider these priorities.
Besides, single family office in Dubai and other global cities count on professional advice from experts. Thus, these offices are actively looking for investment opportunities to mitigate global sustainability challenges. They have not only recognized the ethical value but also the potential of embracing long-term growth.
3. The Power of Measurability
Impact investing is a complex concept in itself. Well, in the world of impact investing, clear and standardized metrics largely define success. However, single family offices must recognize that the absence of uniform metrics has been hindering capital flow into investments that should be tackling some of the most pressing challenges of the world.
Thus, it’s imperative to advocate for standardized definitions to overcome this hurdle. This ensures that credible data will be disseminated. Standardization goes beyond greenwashing scandals, but also lays the foundation for impact capital. Thus, these initiatives from family offices can live up to their ambitions.
Reliable information holds the key to transparency. This can help family offices compare investments fairly and propel themselves to the growth trajectory.
4. Family Unity Through Impact Investing
Impact investing presents a unique opportunity for family offices, where members across generations can nurture the essence of unity. Involving family members in investment decisions deeply rooted in their shared values promotes collaboration. Besides, this goes a long way in strengthening family bonds.
Therefore, families need to leverage this approach to channel their investments towards noble causes. Besides, this should deepen their understanding of shared values and differences.
This approach transforms impact investment into a journey shared by the family. Rather than eyeing mere financial gains, it nurtures better unity among the family.
5. The Long Road Ahead
No doubt, family offices are enthusiastic about impact investing. However, there’s a long road ahead to embracing a widespread approach to this type of investment. Currently, just a small proportion of family office investments are made for impact solutions.
Experts reveal that substantial investments are necessary to drive energy and climate transition and other crucial changes. Presently, family offices have barely scratched the surface, reaching a mere 1.1% of this ambitious goal.
Thankfully, family offices are ideally positioned to spearhead this transformative journey. Gradually, the momentum is building. A robust support system is already in place that should guide family offices to define, measure, and achieve their goals.
As the change takes over how family offices perceive impact investing, the need of the hour is to align investments with their cherished family values. Besides, other secrets to successful impact investing lie in embracing ESG considerations, nurturing familial unity, and remaining committed to a greater global impact. The IMC Group continues to be a catalyst for single family office in Singapore to embrace these changes through professional guidance and advice.
