Australian Impact Investments (Aii) was named the Impact Market Builder of the Year at the Australian Impact Investment Awards. Aii Managing Director and Co-Founder Kylie Charlton says the award comes as recognition of Aii’s contributions to the market and its pioneering work in the space over the past 10 years.
“It’s exciting to look back on where the sector has come,” said Kylie. “We were the first dedicated impact asset consultant in the country. We’ve worked with some of the most pioneering asset owners who’ve integrated impact into their investment strategies. We’ve shifted money from people thinking of impact just as an allocation to thinking of total impact portfolios as well.
“There’s still a long way for [the sector] to go and some days I feel as though we’re still just scratching the surface. But it’s fantastic to see the new entrants, new voices in the room compared to where we were 10 years ago.”
Celebrating ten years of mobilising capital for a better tomorrow
Australian Impact Investments celebrated its 10-year anniversary last November, releasing Impact Report 2024: Celebrating ten years of mobilising capital for a better tomorrow, which reflects on Aii’s ten years of providing impact asset consulting services, dispelling myths and seeking to break down barriers.
“The report walks through what we’ve seen, how we’ve seen the industry evolve and where we’re seeing things headed,” Kylie said.
“There are not that many players who’ve been around for that period of time where their sole focus has been on building their impact investment market. A lot of other advisors are working across much broader portfolios or groups of clients and are not dedicated to building three-dimensional risk-reward impact portfolios.”
Interest must be moved to action
Kylie said that while there continues to be interest in the impact investing market in Australia, it’s really critical for that interest to be moved to action.
“We’re still seeing interest, and obviously action will always lag interest, but we could see a lot stronger momentum there,” she said.
As investment markets facing increased volatility due to the global economic and geopolitical situation, Kylie sees opportunity for investors who have “flexibility with their capital and long-term investment horizons. Such investors are not as concerned with tracking error on a quarter by quarter basis.”
“Trusts and Foundations should consider themselves amongst those investors because they’re into perpetuity, they’re long-term pension investors, where there is a real opportunity to lean into private market investing, which will have additionality to address the social and environmental challenges we have ahead of us.”
Kylie said that despite the uncertainty in financial markets, those with long-term patient capital should lean in to make sure we don’t end up in a freeze of activity in a time when we need more activity.
“We can’t let the current environment [including the US walking back from environmental commitments] deter us from taking the action needed to ensure that we have the planet and society we want to live in. I think you’re able to do that with both a financial discipline and with an impact discipline around it.”
Kylie recoginses that while it is a difficult investing environment, she continues to see strong opportunity particularly for those that have long-term horizons, perpetual opportunities.
“When looking at investment performance over seven to 10-year horizons, this is just a blip in the market that will rectify itself. We don’t want people with capital to address social and environmental challenges to step back now — this is the time to really step up.”
Embedding impact in portfolios
Kylie said we also need to draw attention to the fact that impact can be integrated across a whole portfolio. That means every investor has an opportunity to participate.
“Not all investors can engage in the private markets, but they can do things in the public markets where you’re going to have your shareholder engagement and advocacy to ensure that companies are behaving well and are behaving in a way which is going to be positively contributing to people and planet.”
“We must make sure that it’s an inclusive conversation for all investors and asset owners and that we don’t just look at impact in isolation in one part of our portfolio.”
The Australian Impact Investment Awards were supported by event partners Impact Investment Summit Asia Pacific, Social Impact Hub and the Impact Investing Hub, while the Impact Market Builder of the Year award was sponsored by Unless Financial.
Click here to access Australian Impact Investments’ Impact Report 2024.