Impact investing in the age of President Trump
Tuesday, March 7, 2017
It’s too soon to tell what effect the election of Donald J. Trump to the presidency will have on impact investing. But if implemented, Mr. Trump’s policies could have a profound effect on issues near and dear to a growing number of investors: the environment, social issues and corporate governance.
The best-case scenario for impact investors is that impact investing will, over the long term, become a normal part of investment criteria and will produce change for the better, no matter who occupies the White House. The worst-case scenario: They find themselves standing against the herd on the Street — something that rarely works out well, at least in the short term.
So far, there has been no big post-election movement of assets in or out of funds intended to generate a measurable, beneficial social or environmental impact alongside a financial return. While investors yanked $127 billion from open-ended, actively managed stock funds last year, they added $3 billion to funds with some type of sustainable, responsible or impact mandate, according to Morningstar Inc.
Assets in socially responsible investing, which include assets tied to an impact mandate, hit $8.7 trillion in 2016. That’s up more than 183% since 2010, according to US SIF, The Forum for Sustainable and Responsible Investment, a Washington, D.C., association of socially responsible investment professionals.