In 2023, the European Sustainable Investment Forum (Eurosif), the University of Hamburg and Advanced Impact Research GmbH revised the methodology for market studies on sustainability-related investments and put impact at the core. The new methodology proposes four different categories of sustainability-related investments that reflect the “ambition level” of the investments to actively contribute to the transition towards a sustainable economy. The categories are: Basic ESG, Advanced ESG, Impact-Aligned and Impact-Generating.

You can read the whole article here.

 

Eurosif today published a new methodology for the purpose of future market studies on sustainability-related investments across Europe. The methodology and accompanying questionnaire are set out in a report explaining the approach taken, the proposed investment categories and its core features.

The methodology was developed over the course of 2023 by Eurosif’s SRI Study Group (SSG) in cooperation with Prof. Timo Busch from the University of Hamburg and Eric Pruessner from Advanced Impact Research (AIR). Market practitioners from across Europe were engaged in this process.

Past market studies on sustainability-related investments typically gathered data on a range of different sustainability-related investment approaches and aggregated them to one of a number of “sustainable investments”. However, these statistics did not differentiate between investments based on their investment strategy and/or objectives to actively support the transition towards a more sustainable economy which since the introduction and rollout of the EU sustainable finance framework is becoming an increasingly prominent feature of the European sustainable investment market.

The revised methodology is designed to reflect the evolving nature of the market and proposes four distinct categories of sustainability-related investments that reflect on the investments’ ambition level to actively contribute to the transition towards a more just and sustainable economy. These categories are: Basic ESG Investments, Advanced ESG Investments, Impact-aligned Investments, and Impact- generating Investments.

The methodology will serve as a basis for future market studies conducted by Eurosif in cooperation with its members. The methodology will be implemented over the course of 2024 with the first market study expected in 2025 covering the data for 2024. The methodology will also be available to all Sustainable Investment Forums globally and other stakeholders. This methodology is not intended to reflect the categorisations of sustainable products as established within regulatory frameworks, but to be sympathetic with such systems and labels as they emerge.

AIR, together with the University of Hamburg, has published an article in Absolut Report on the topic of impact measurement for impact investments. The article is based on a recently published white paper on the topic. This is because the impact investment segment is increasingly in demand from institutional investors. However, there is a lack of clarity with regard to classification and demarcation. It is necessary to establish standards for impact measurement that are recognized by the various players and initiatives. It is also important to find solutions that transcend national borders.

You can read the article here (only available in German language/please use a language translation tool of your choice).

 

The paper “Position Paper on Improving the SFDR – Proposal for financial product categories from a sustainability perspective” was produced in cooperation between the Sustainable Finance Research Group at the University of Hamburg represented by Prof. Timo Busch, Advanced Impact Research (AIR) and F.I.R.S.T e.V.. It has been nourished by the review- and assessment works that have been done for several hundreds of investment funds regularly applying for the SRI quality standard FNG-Label.

It proposes categories for financial products from a sustainability perspective in the context of the current targeted consultation of the Sustainable Finance Disclosure Regulation (SFDR). The goal is to find a balance between clear terminology, consistency between existing sustainable finance regulations, clarity of proposed categories for investors and minimum effort for transitioning to the new categories.

Read the full paper here.

 

Do investments in the context of sustainability contribute to a better world?

Prof. Dr. Timo Busch, Professor of Management and Sustainability at the University of Hamburg and member of the Academic Advisory Board, and Eric Prüßner, Senior Researcher at AIR, recently published a whitepaper entitled “Principles for Impact Investments: Practical guidance for measuring and assessing the life cycle, magnitude, and tradeoffs of impact investments”.

The whitepaper developed 18 principles that represent an important step toward coherent and practical guidance for measuring and evaluating impact investments. This should be seen as an ongoing project to stimulate discussion, thought and development, with the overall aim of contributing to further standardization in the field of impact investing.

Read more in the whitepaper

Major U.S. investors are under attack from right-wingers for their sustainable investments – and are scaling back their involvement. But a new activist scene is now fighting climate change in the financial market.

“Now that sustainable investments have entered the mainstream, investors are increasingly asking why so little is changing in the real economy,” comments Prof. Dr. Timo Busch, Professor of Sustainability and Management at the University of Hamburg and part of our Scientific Advisory Board. That explains the popularity of impact funds.

Does that mean the ESG movement is finished? Are funds just publicly not committing to sustainability anymore – or are they pulling their money out, too?

You can read the whole article here (only available in German language/please use a language translation tool of your choice).

Urgent societal issues such as climate change and social inequality require fundamental organizational changes toward sustainability. While some companies are moving toward sustainability, others are struggling to make progress. One reason for this is differences in the way sustainability issues are perceived and interpreted.

Managing organizational change requires leaders to engage in meaningful activities to change how their employees interpret issues. However, detailed insights into how differences in employees’ roles and role identities interact with organizational sense-making are lacking. A better understanding of the interplay between role identities and sense-making is therefore crucial, as it sheds light on the microfoundations of organizational change.

This research gap is addressed by Joern Hoppmann, Marcel Richert and Timo Busch, Professor of Management and Sustainability at the University of Hamburg and member of our Scientific Advisory Board. Their 18-month longitudinal case study of a sustainability initiative at a medium-sized company has important implications for practice. It helps to understand how managers can design interventions to change frameworks and role identities from employees.

You can read the whole article here: https://doi.org/10.1177/10860266231183955 (Hoppmann, J., Richert, M., & Busch, T. (2023). Not My Business: How Individuals’ Role Identities Shape Sensegiving During Corporate Sustainability Initiatives. Organization & Environment, 0(0)). 

The meaning of the term “impact” is gaining importance in the financial industry. However, there is a problem. For what “impact” means and how it can be determined in concrete terms has not been conclusively clarified, according to Prof. Timo Busch of the University of Hamburg.

You can read the entire article here (only available in German language/please use a language translation tool of your choice).

The European Commission is jeopardizing its own sustainable finance goals with its proposed European Sustainability Reporting Standards (ESRS), warn Timo Busch, professor at the University of Hamburg and part of AIR’s Scientific Advisory Board, Andreas Höpner, professor at University College Dublin, and Lisa Breitenbruch, senior researcher at AIR. They say the severely watered-down targets would counteract the EU’s intended funding of the transformation to a climate- and nature-resilient economy.

Read the full article here (only available in German language/please use a language translation tool of your choice). 

Since spring 2022, AIR has been working together with the European Sustainable Investment Forum (Eurosif), the University of Hamburg and F.I.R.S.T e. V. to develop standards for a clearer definition of sustainable investments with a focus on the contribution to a sustainable transition. Based on the published classification scheme for sustainable investments, AIR, Eurosif and the University of Hamburg are currently developing a methodology.

As part of the Swiss Sustainable Investment Market Study 2023, the Swiss Sustainable Investment Forum (SSF), in cooperation with the University of Hamburg and AIR, tested this classification in a pilot study (see press release). The pilot study aimed to gather valuable insights and empirical values, especially for the innovative classifications “Impact Aligned” and “Impact Generating”. For this purpose, investments were classified according to their main objective and level of ambition in terms of their contribution to a sustainable transition.

The full market study can be found here.