The report analyses the growth of impact investment strategies among European pension funds, which have been increasing steadily despite issues. The volume is nowhere near the level required to close the funding gap for the United Nations Sustainable Development Goals by 2030. The journal examines the reasons driving more pension funds into impact investment and those stopping others, such as regulatory limitations and fiduciary duty constraints.

The primary ESG issues discussed in the report include concerns, such as regulatory constraints limiting pension funds’ exposure to specific asset classes or geographies. Additionally, some pension funds are reluctant due to risk and fiduciary duty concerns.

According to the paper, pension funds must be more proactive in integrating impact investing into their strategy. Despite regulatory limitations, pension funds that incorporate impact investing into their strategy can reap the benefits of financial returns while maintaining social and environmental impact transparency. Monitoring of impact investing is critical to ensure that it aligns with the initial objective, and corrective action should be taken if any deviations observed.

The journal provides a case study of PGGM, a leading Dutch pension fund administrator, to understand the success of impact investing in affordable and social housing. PGGM’s affordable and social housing investments in various countries have led to increased social and environmental impact transparency while maintaining financial returns. The investment model’s measurable impact has led to a positive correlation between impact and stock market value. Consequently, PGGM’s approach emphasises the importance of making impact direct and measurable.

The report analyses the emerging investments in affordable and social housing, a potential investment solution for pension funds looking to integrate impact investing into their strategy. Affordable and social housing investment can provide financial returns and social/ environmental benefits, contributing significantly to the funding gap to achieve the United Nations Sustainable Development Goals by 2030.

Additionally, the journal offers valuable insights into engaging and working with like-minded organisations and initiatives in building the momentum to protect oceans and ensure economic and social prosperity.

The journal concludes that despite steady growth, pension funds need to be more proactive in integrating impact investing into their strategies. The report provides valuable insights into the reasons, benefits, and challenges of impact investing for pensions. It also emphasises that impact investing is a driver of financial performance and a necessary tool to achieve the United Nations Sustainable Development Goals by 2030. Pension funds that incorporate impact investing into their investment strategy can reap the benefits of financial returns while simultaneously maintaining social and environmental impact transparency.