Introduction

Institutional asset owners (IAOs), including pension funds and insurers, are exploring how to align investment strategies with social and environmental goals. GIIN’s research and stakeholder engagement highlight how an *impact lens* can be used to embed these goals alongside financial objectives. The report is based on 30+ roundtables with over 60 IAOs (2021–2024) and includes four case studies. An impact lens approach involves defining impact priorities, identifying investment opportunities across asset classes, and targeting investments that deliver both financial and real-world outcomes.

Adopting an impact lens

Applying an impact lens allows IAOs to consider beneficiaries’ broader interests without compromising fiduciary responsibilities. It expands investment options to include those contributing to beneficiaries’ future quality of life. Financial returns remain central, but the lens helps identify opportunities that also address societal and environmental needs. GIIN outlines four characteristics of impact investing: intentionality, use of evidence, impact performance management, and supporting the field’s growth. Importantly, impact investing does not imply financial underperformance. Strategies range from ESG risk screening to defined impact priorities with active contribution.

Institutional asset owner cases

SYPA – leveling up in South Yorkshire region

South Yorkshire Pensions Authority (SYPA), managing USD 14 billion, focuses on inclusive regional development. With 5% of assets committed locally, its priorities include housing, SME finance, and industrial renewal. A GBP 10 million private debt investment supported redevelopment in Sheffield, returning 0.7% over the hurdle rate. The strategy aims to reflect community needs while diversifying sources of return.

PGGM – improving health in the Netherlands

PGGM, with USD 256 billion AUM, serves 3 million health and well-being sector workers. In 2023, it adopted a “3D” strategy—risk, return, and impact. Impact targets include 6,000–10,000 jobs automated, 0.27 QALYs gained per patient, and 1,000 senior housing units added. Its Living Care Fund supports aged care real estate, now with 95 sites and 2,000 units. PGGM distinguishes alignment from real-world contribution and is refining its measurement methods.

Zurich Insurance – addressing climate change globally

Zurich’s impact strategy began in 2012, with a public goal in 2017 to invest USD 5 billion to avoid 5 million tonnes of CO₂ annually and benefit 5 million people—targets since exceeded. With USD 7.9 billion allocated, Zurich focuses on green bonds (87% of impact AUM) and impact-linked private debt. A EUR 130 million investment in Iberdrola’s green bonds supports offshore wind and avoids 22,000 tonnes CO₂ yearly. Zurich assesses both potential and issuer commitment in evaluating bonds.

MassMutual – creating equal access to capital

MassMutual committed USD 300 million to address systemic barriers in venture capital. Its Catalyst Funds focus on diverse-led and rural businesses, especially in Massachusetts. Outcomes include shifting funding ratios and fostering generational wealth among underrepresented groups. An investment in CareAcademy, a platform for upskilling caregivers, aligned with this theory of change. Over 600,000 learners have completed 3.3 million training hours through the platform.

Key insights from the four cases

Each IAO maintained financial discipline, showing impact strategies can meet return thresholds. All cases linked impact priorities to core institutional missions and beneficiary interests. The use of diverse asset classes allowed alignment with both regional and thematic objectives. A clear theory of change helped structure investments and monitor impact. Applying an impact lens supports diversification and may uncover overlooked opportunities.

Conclusion

IAOs can adopt an impact lens by defining priorities, creating strategy, and identifying suitable investments across asset classes. A small carve-out may be a starting point, but integration across the portfolio is the goal. The GIIN continues to support the sector with tools and guidance to embed impact alongside financial considerations.