Golding believes that consensus is building around the crucial role of the private sector in facilitating industrialization, growth and sustainable development. Responsible investing is fast becoming mainstream and can be implemented in an investment portfolio through enhancing the risk management process by considering environmental, social and governance (ESG) criteria.
Impact Investing goes further than this, by making intentional investments into companies, organizations, vehicles and funds that have “the intention to generate positive, measurable social and environmental impact alongside a financial return.” (The GIIN)
Since signing up to the United Nations Principles for Responsible Investment (UN PRI) in 2013, Golding has systematically incorporated Environmental, Social and Governance (ESG) issues into its decision-making processes across all asset classes. Golding fully embraces the use of ESG to support and advance responsible investing and sees the process as fundamental to adequate risk assessment. In 2019, Golding received an A+ rating from UN PRI for manager selection and monitoring in fixed income, private equity and infrastructure.
Golding has been monitoring the impact investing sector for several years and intends to go beyond ESG by leveraging the resources and expertise of the firm to make a contribution to addressing some of the fundamental problems of society through impact investing.
Since most institutional investors have fiduciary responsibilities to meet return benchmarks, Golding focuses on impact investing strategies with market-rate return expectations which are better suited to utilizing private capital at scale.
Golding has been monitoring the impact sector for several years, and believes that a credible impact strategy must incorporate the following four components:
- generate market rate returns,
- address specific social or environmental needs, most commonly identified by the UN Sustainable Development Goals (SDGs),
- provide comprehensive and transparent impact reporting to investors, and
- invest with clear intent to drive positive outcomes.
Golding has identified emerging markets private debt as its first strategy for impact investing. With the hiring of an experienced emerging markets credit and Impact investment team in London, this strategy will benefit from leveraging the strengths of the overall Golding platform with its long-standing expertise in private debt investing.