Highlights of Demystifying ESG vs Impact Investing Panel Discussion
by Amanda Fagan
On May 4th, 2023, the Financial Women of San Francisco (FWSF) and BlackRock hosted a panel discussion on "Demystifying ESG vs Impact Investing.”
The event's moderator, Kristin MacLaggan, Director and Global Talent Lead for ETF & Index Investing at BlackRock, led a distinguished panel that included Jessica Huang, Managing Director and Head of Americas Sustainable Investing Solutions at BlackRock, Mandira Reddy, Director at Capricorn Investment Group, and Melissa Maquilan Radic, Managing Director of Investor Relations & Capital Markets at IMPACT Community Capital.
The panelists discussed the evolving landscape of sustainable investing, emphasizing the importance of integrating environmental, social, and governance (ESG) considerations into investment decision-making, the role of technology in driving sustainable investing, and the challenges and opportunities of impact investing. They also clarified the difference between ESG and Impact Investing, noting that while ESG is a data toolkit that can be used to enhance returns in a way that aligns with their overall values, Impact Investing is a specific strategy that uses ESG information to make investments that provide measurable social or environmental benefits.
The panelists recommended utilizing the United Nations Sustainable Development Goals as a helpful benchmark for mapping out ESG goals at the beginning of a project. However, they also acknowledged that some investments aimed at benefiting society may be difficult to assess. Affordable housing is one such example, as its long-term impact on families' safety and stability is challenging to quantify. As a result, measuring the effectiveness of such investments presents a significant challenge.
The speakers addressed the ongoing trends among investors in the sustainable investment landscape. As the effects of climate change, such as droughts, wildfires, and extreme weather events, continue to occur, investors are becoming increasingly aware of the pressing need for sustainable investment.
They also shared their favorite sustainable funds. For example, the Sustainable Investors Fund, a private equity partnership, is designed to create significant value through ownership and early-stage investment in public and private asset managers who incorporate sustainability as a key driver of investment returns. The fund has deployed catalytic capital into over a dozen emerging asset management firms aiming to address climate change mitigation, financial inclusion, and sustainable markets. The Blackrock Impact Opportunities Fund accelerates positive economic outcomes and creates collective wealth for undercapitalized racial and ethnic groups, with a particular focus on Black, Latinx, and Native American communities in the United States. Lastly, IMPACT Community Capital’s bridging loan strategy was created to provide short-term loans to borrowers seeking to preserve existing affordable multifamily properties, with the aim of safeguarding valuable existing affordable housing.
The networking happy hour that followed the panel discussion provided attendees with the opportunity to connect with each other and continue the conversation. Overall, the event was a great success, providing attendees with a deeper understanding of ESG and impact investing, as well as valuable networking opportunities.