This report offers practical guidance and resources for family offices interested in combining investing with impact. Family offices are uniquely positioned to apply their values to investments and have an unconstrained view to deliver impact. This report provides practical steps, resources, and information to shift to impact investing, be it transitioning an existing family office, advocating internally for impact or building towards a 100% impact portfolio.
The report also covers the creation of an impact investment framework and theory of change, development of an investment policy statement, and the pros and cons of creating an impact ‘carve-out’. It emphasizes the importance of working with external advisers and managers while exploring the steps needed to start allocating capital for impact.
The report encourages family offices to target specific impact goals, harnessing the UN SDGs as their reference, and how capital should be allocated across the Spectrum of Capital, which can be framed as the targeted percentage for strategies that avoid harm, benefit stakeholders or contribute to solutions.
The report recognises the importance of establishing robust governance within family offices and emphasizes the role of the investment policy statement (IPS) in translating the family’s impact investment ambitions into practical guidelines.
Finally, the report discusses the challenges faced by trust structures in intergenerational wealth transfer and how to become an impact investor within trusts. There is a need for beneficiaries to share data evidencing that the market can deliver risk-adjusted, market return and to work with trustees who understand and are competent in sustainable finance.