At AIM, we are committed to transparent impact reporting which we believe provides investors with reliable evidence of how their capital is invested for both financial returns and environmental and social impact.
We are delighted to have been highlighted in a recent survey conducted by Environmental Finance on impact reporting best practices.
The survey, and subsequent report, correctly highlights the challenges facing asset managers in collecting impact data, both in terms of volume and the necessary expertise. We believe it is crucial to have dedicated resources in-house, not only to verify the bonds and issuers in our portfolios but also to report on their environmental and social impact. We are proud to maintain coverage ratios of over 90% in our annual impact reports.
In the report published by Environmental Finance, Katie House, from our sustainability team, explains our multi-faceted approach to impact data collection. She notes how, as a specialist impact bond investor, we are able to build strong relationships with issuers, assisting us in our data collection.
The report also explores the challenges when it comes to reporting on impact. There is a lack of comparability of impact metrics, which can lead to challenges in data amalgamation. To help mitigate this, we seek to collaborate with peers to encourage standardisation, for example partnering with ISS-ESG and Lion’s Head Global in 2016 to develop the publicly available Rockefeller Foundation Funded Carbon Yield Methodology. This methodology seeks to quantify the environmental impact of a green bond in terms of GHG emissions avoided through the financed activity.
We continue to build on transparency and depth in our impact reporting, last year expanding our reporting to include TCFD-aligned reporting and physical risk analysis.
We are pleased to see our expertise being recognised, with Environmental Finance choosing to highlight the 2019 Impact Report of our flagship fund (LO Funds – Global Climate Bond) as a case study in their report.
You can read the full report on Environmental Finance’s website here.