Private equity impact investor wanted for pilot project

The impact investing sector is experiencing rapid growth. Yet the great diversity within the sector opens the door to impact washing. With a new Impact Certificate, Forum Ethibel wants to use its years of expertise to advance standardisation and transparency within the sector. Maybe you are the private equity impact investor who wants to participate in our pilot we are looking for?

Impact investing uses capital in a targeted manner to achieve social and sustainable results or changes. This way of investing has been growing strongly in recent years. Even though impact investing currently amounts to only 0.5% (80 billion euros) of the total European investment market and between 1 and 2.5% of the Belgian investment market (depending on the definition used), this percentage is expected to increase quickly. rises.

“Private equity investors' increasing focus on impact has led to the development of a large number of principles, frameworks, standards, tools and indicators for impact management and measurement,” according to Sofie Versmissen, Research Officer at Forum Ethibel. “Until now, the concept of impact has not been formalised, leading to different interpretations. The multitude of terms and concepts make it difficult to find your way in the world of impact investing.”

Within the European context of impact investing, three generally accepted concepts are important: intentionality, measurability and additionality. Due to the heterogeneity in the sector, other concepts are linked to impact investing. The first is attribution: attributing the positive or negative impact generated to a specific actor. In addition, you often read the term materiality, namely determining which investments have a pertinent impact. Materiality is often measured by equating the ecological or social impact with a monetary value, also called 'social return on investment' (SROI).

Some impact investors place their own emphasis on achieving impact objectives on the one hand, and financial returns on the other. Investors who see achieving the impact objective as their main goal and therefore accept a lower market return are sometimes called 'social investors'.
“It is essential to understand how impact investing concretely addresses pressing social and environmental problems,” says Versmissen. “Asset managers usually establish an 'Impact Measurement & Management' (IMM) methodology. They do this not only to measure their impact, but also to optimize it during the investment period.”

With an Impact Certificate, Forum Ethibel remains true to its tradition of constant innovation. “Given that impact investing is relatively new and there are no universally accepted standards or definitions yet, impact investors report voluntarily and according to their own interpretation on the impact achieved,” Versmissen explains. “The danger of this is that this - whether intentional or not - results in impact washing or overclaiming. We are trying to solve this with our newly developed methodology. We are certainly still looking for impact investors who want to participate in a pilot.”

Are you or do you know an impact investor who wants to participate in our pilot? Contact Sofie.

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