Around two-thirds (64%) of those surveyed seek managers with a dual focus approach delivering positive, measurable social impact alongside a financial return. This shows most LGPS fund professionals surveyed believe they can achieve social impact without sacrificing returns.
The research, which was commissioned by AlphaReal, the specialist secure income asset manager, also finds asset managers are able to adequately quantify this social impact. More than nine out of ten (91%) of respondents say they receive satisfactory social metrics from their investment managers.
However, when it comes to wider ESG reporting, almost half (47%) of LGPS fund professionals say that a lack of meaningful data from their asset managers is the main challenge when meeting their ESG reporting obligations.
The research also finds that nearly two-fifths (39%) say a lack of standardised reporting is the biggest obstacle. The remaining 14% identify a lack of suitable benchmark data as a hinderance to ESG reporting.
Ed Palmer, CIO and Head of Sustainability, AlphaReal said, “The quantification of social value is essential to accurate ESG reporting, and we are pleased that most survey respondents are receiving satisfactory social metrics. At AlphaReal, we use quantitative tools and partner with independent firms with strong analytical disciplines to provide our investors with measured and meaningful social impact information.”
Maria Vaggione, Head of ESG, AlphaReal said, “It is important to understand what we can do to provide solutions to the challenges faced by the LGPS community, from delivering innovative local investment opportunities to the reporting of the impact generated by our investments, in a way that is measurable as well as meaningful.”
AlphaReal invests in UK and European assets with predictable, secure, long-term cash flows. The asset manager provides market leading and innovative real asset solutions across a range of investments such as commercial ground rents, UK renewable infrastructure, and social infrastructure including health, housing and education.