Client Case Study

Sustainable Investing

Understanding the Impact of Investments for the Cambridge Institute for Sustainability Leadership

 

Client profile

The Cambridge Institute for Sustainability Leadership (CISL) is a world-class organization at the University of Cambridge which develops solutions for a more sustainable society. For over 30 years, they have provided insight to a variety of individuals and organizations, using an interdisciplinary approach to catalyze change.

The Investment Leaders Group (ILG) is a voluntary initiative facilitated by the University of Cambridge. It brings together 12 leading financial institutions with over $12 trillion in AUM to generate solutions to the world’s biggest problems.

The challenge

The environmental and social impact of investment funds are difficult to quantify, often relying on ambiguous or abstract metrics. At the same time, supporting progress against global issues has become a more pressing objective of the sustainable finance industry. CISL sought to create a framework that would help investors to better understand the impact of their portfolios in a tangible, clear-cut way.

Our solution

As part of a broader framework to capture the impact of investments, KKS Advisors reviewed the landscape of existing environmental and social metrics and developed a metric to capture a portfolio’s contribution to enhanced “wellbeing”. We worked with CISL to develop the wellbeing metric and contribute to an overall dashboard which could offer investors a streamlined way to quantify the environmental and social impacts of their investments. 

The Cambridge Impact Framework offers a new approach for the investment community to measure impacts aligned with the UN Sustainable Development Goals and provides useful insights on how impact measurement can evolve in the future, to enable investors drive positive impacts through their portfolios. 

Key outcomes

The report provides a new framework for investors to be able to quantify social and environmental impact. The framework was overseen and piloted by the Investment Leaders Group, which includes major investors including HSBC, State Street, Nordea amd UBP. Commenting on the report, Nicolas Faller, Co-CEO, Asset Management of Union Bancaire Privée (UBP) says: “There is increasing demand, especially among millennials and the incoming Generation Z, for reporting social and environmental impact. However, the level of detail expected does not typically extend beyond that of an overview of the main environmental and social characteristics of a fund, with more in-depth information lacking.”

This framework uses a novel combination of metrics, and offers ideas on how these metrics might evolve in the future. The report has been cited in several publications, including ECOFACT Quarterly and The European Court of Auditors Journal.