JTC Releases Second Annual Survey on Evolution of ESG and Impact Investing

Despite “anti-ESG” media discourse, findings indicate that perceptions of ESG and impact investing remain positive – though most remain confused about the differences between the two terms and various reporting frameworks

SAN JOSE, Calif.--(BUSINESS WIRE)--Drawing on feedback from nearly 300 advisers, fund managers, and investors across the U.S. and Europe, a new research report published by JTC – in collaboration with OpportunityDb – provides fresh insights into ESG and impact investing perceptions, challenges, and goals in 2023.

“As this burgeoning sector comes under heightened scrutiny, confusion over the fundamental differences between ESG and impact investing speak to broader issues highlighted by this year’s survey – around measuring impact, understanding various reporting frameworks, and meeting particular investors’ preferences,” said Reid Thomas, Chief Revenue Officer of JTC. “What’s clear is that amid proliferating offerings, the focus on particular, differentiated, and outcome-oriented impacts that meet investors’ personal values and passions will be critical.”

Key findings of this year’s research report include:

• Perceptions of ESG and impact investing are overwhelmingly positive. Nearly three-fourths of total respondents incorporate ESG metrics and standards into their investment strategy more than half the time, and most also agree that accepting a lower financial return isn’t usually necessary for achieving high social impact.

• Most respondents believe impact investing and ESG investing are the same. The findings reflect a persistent confusion around the differences between the two terms as both gain increasing traction in the marketplace – suggesting the need for more clarity, transparency, purposeful measurement, and focus.

• Impact investors have a wide range of different passions, meaning personalization is key. When asked about the best markers of social impact responses were fairly evenly spread across numerous indicators, from internet accessibility to improved access to healthcare to a decrease in food deserts and crime.

• Reporting remains a fundamental challenge, with slow movement towards standardization. Less than a third of respondents find impact investing reporting easy. Top challenges include a lack of defined standards, access to data, and evolving to regulations.

• Opportunity Zones continue to gain momentum. Investors are interested in a wide range of OZ funds, from real estate to operating businesses to energy, and most describe it – accurately – as both a tax incentive and economic development tool.

The full research report – available for free download here – unpacks the above findings and provide a set of best practices for investors, advisors, and fund managers to plan, implement and measure during another crucial year of ESG and impact investing.

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