A guide to help investors define how they approach sustainable investing was released Thursday by impact investing consultant Tideline.
"Truth in Impact: A Tideline Guide to Using the Impact Investment Label," offers a framework for labeling impact investments.
The guide also shows how the labeling framework can help investors compare different approaches to sustainable investing based on how they integrate three core pillars of impact investing: intentionality that explicitly targets specific outcomes; contributions to achieving targeted social or environmental outcomes; and measurement for monitoring and reporting impact performance.
While some investments could claim to be impact-focused, the impact investment label should be reserved for funds and strategies that combine high degrees of all three pillars, according to the Tideline guide.
"A growing number of asset managers are unsure of what it means to claim the 'impact' label and are uncertain of what such a label may communicate to investors and other external stakeholders," said Ben Thornley, Tideline managing partner, in a news release.
"In the absence of universal standards for product and fund labeling, we believe accurate self-classification backed up by robust evidence and independent verification is a critical part of any sustainable investment journey and essential to growing the sustainable investing space with integrity," Mr. Thornley said.
The guide includes labeling case studies of an emerging markets public equities manager, a global environmental commodities investor, and a European real assets investor.