According to a study by DWS and Create-Research, 22% of the world’s pension funds have administered impact investing strategies via passive investing. The report, titled “Impact Investing 2.0–Advancing into public markets,” attributes the rise in impact investing demand in passives to the fact that reaching net zero targets by 2050 requires $100 trillion in investments and implementing the UN’s Sustainable Development Goals by 2030 necessitates around $5-7 trillion a year in spending.  

According to a study by DWS and Create-Research, 22% of the world’s pension funds have administered impact investing strategies via passive investing. 

The report, titled “Impact Investing 2.0–Advancing into public markets,” surveyed 50 of the world’s largest pension funds in Asia, North America, Europe, and Australia, which manage more than 3.3 trillion in total assets.  

The survey found that the increased interest in passives in impact investment was due to significant funds being needed to hit net zero targets by 2050 and reach the UN’s Sustainable Development Goals by 2030.  

“Private markets cannot raise this capital on their own due to their limited scalability. However, publicly-traded instruments such as funds and ETFs offer both the scale and reach to mobilise the needed capital,” said DWS and Create-Research, adding, “As net zero and the UN’s SDGs can be replicated with rules-based indices, such as EU Paris-aligned and EU climate transition benchmarks, SDG index products, green bond indices, as well as thematic passive exposures using ETFs and mandates, these can help impact investing make a breakthrough in the public markets.” 

Source: https://esgclarity.com/pension-funds-look-to-passives-for-impact-investing/