Impact is getting easier to measure

KBI Global Investors and the €94 billion Swedish national pension fund Sjunde AP-fonden (AP7), have published a report, “Improving measurement of impact in listed equity” offering insights into metrics of impact in listed water equities.

Both KBIGI and AP7 have seen companies making greater efforts to provide better information to investors.

The work undertaken shows that impact can be assessed in both quantified and subjective ways, with the most sensible approach from the adoption of a holistic approach.

Johan Florén, head of ESG at AP7, said: “Financial return is easy to measure, but that is not the case when it comes to measuring the benefit of an investment for society, where authoritative standards are lacking.

“After three years of work, it is time to summarise the lessons we have drawn so far.”

Eoin Fahy, KBIGI’s head of responsible investing, said: “Measuring impact poses a real challenge to asset owners and investment managers, given that few companies report on their impact, and those that do report use different metrics.”

“However, the work we have undertaken with AP7 shows that impact can be assessed in both quantified and subjective ways,” Fahy continued.

“Our detailed knowledge of the companies in which we invest has allowed us to access and understand a level of granular information that would not otherwise be available.”