Impact + Responsible Investing

Investors everywhere are increasingly more mindful of environmental, social and governance (“ESG”) issues and recognize the power of making a positive social and/or environmental impact through their investments, without sacrificing investment returns. Goodwin is at the forefront of this movement, providing innovative and effective counsel to today’s most discerning investors.

Why impact and responsible investing? Impact and responsible investing is among the fastest growing, most prolific form of global financial innovation. Worldwide assets in this space increased more than 60% between 2012-2014 (from $13.3 trillion to $21.4 trillion), outpacing growth among all professionally managed assets. While venture capital and private equity investments have dominated the impact space, impact and responsible investing occurs across all asset classes.

Why such rapid growth? Available global capital is at a decided surplus, and increasingly focused on funding “the good ideas.” An overwhelming majority of investors recognize that all investment has an impact, and are increasingly committed to ensuring that those impacts are positive – “doing good, while doing well”. This growing commitment to impact and responsible investing is widespread, with an estimated 77% of US affluent investors recently surveyed indicating they want their assets to have a positive impact on society.

For some, questions remain on the tension between impact and financial returns. For others, the contrary evidence is mounting that impact and returns do not need to be mutually exclusive. While some in this space focus more on the philanthropic end of the spectrum of impact and responsible investing, current data indicates that when these strategies target financial returns, they are performing close to the market, and in some instances, outperforming traditional asset class strategies. As a result, a new and different relationship has emerged for investors and investment managers alike, one in which cogent verification of impact and/or ESG benefits and screens is increasingly commonplace, if not essential to success.

The motivations informing the shift toward impact and responsible investing are clear, and the opportunities are rapidly gaining market traction. It is therefore essential for investors and asset managers seeking to navigate this space to understand the complex landscape to  generate stronger results.

Why Goodwin? Impact and responsible investing demand the unique team and skill set, with broad financial innovation experience, that Goodwin brings to the table. Goodwin is the “go-to” firm for the special needs of innovative investors, financial institutions, asset managers and entrepreneurs. We are accustomed to meeting the nuanced needs and goals of these investors and managers, and have the depth of experience to design successful structures and systems necessary in responsible and impact investing.

Our Impact + Responsible Investing team is structured on a cross-disciplinary basis with experience across the spectrum of asset classes and practice areas to identify and address unique legal issues, including: ESG and sustainability certifications, B-corp formation/certifications, ILPA compliance, FCPA compliance, tax-exempt status, ERISA and others. We also understand the challenges of measuring ESG and other impact metrics. This movement speaks to the firm’s history of being on the forefront of unprecedented change effecting our clients, and we are committed to meeting the needs of this emerging group of investors.

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