An Examination of Impact Investing

G funds based on Bloomberg Intelligence estimates. So let's get to our guests see what she and her team are seeing when it comes to impact investing in E s G. Sarah Bratton hughes his head of E s G and Sustainable Investing in America's Century Investments. She joins us phone on the phone from New York City. American Century. By the way, they're controlling owner is the biomedical research organizations Stower's Institute for Medical Research. The firm directs its profits

to their efforts to defeat life threatening diseases. So uh, they're not only investing for others. They really are kind of walking the talk. Sarah, nice to have you here with Mike and myself. What interest are you seeing an E s G right now amid all the market volatility thank you for having me, Carroll. We are still seeing UM increased interest and E s G and sustainable investing. Although those headlines about redemptions, although the redemptions have gathered headlines,

you can't really look at them in a vacuum. You have to look at them versus the broader market as well. So UH, this year we conducted the fifth edition of our Impact Investing survey, and there were some really interesting UH findings and there are all just talk about these three things that really surprised me. UM Here in the

US we've seen increased appeal of impact investing. But interestingly, it was probably the first or only survey I've ever seen that men had preferred impact investing over a woman. And when you really killed back the onion and looked at the numbers, what you saw was actually, there's a delta around what the education and impact investing is for

a woman, UH, particularly in the baby boomer generation. So as we think about the transfer of wealth, UM, people often talk about the intergenerational transfer of wealth, but I like to think of it first as an intergender transformation of wealth. What we've also noticed is the dominance dominance of the S factors in the U S so UM consistently. UM U S investors, when they're looking at the factors that they want to impact consistently have had more appeal

in S factors than our global counterparts. So what we have observed this year again, healthcare is the most important factor from a US perspective. Climate is up there second, but there isn't another E factor from a U S perspective, UM whereas that is dominating, Climate dominates the UK, Germany and Australia. And then the third and final that is on greenwashing, where over fifty of the investors were concerned about greenwashing. I would actually, Carol, think that number was

higher Vay within marketing. I would agree. I would agree because I really do feel like anything with the s G and impact, people are like, Okay, enough of it. We've seen a ton of money go into it. Now show me that you're really doing it. Mike, do you feel the same way. Yeah, well, you know, Carol, it's sitting again, Sarah. There's certainly been a bit of a backlash from the right side of the political aisle towards

the notion of the SG in general. Sarah. I'm wondering if you view that as any sort of legitimate risk going forward, especially no as these mid term elections come up and a lot of people expecting the Republicans to gain House and gained seats in Congress. Is there is this backlash sort of in the early phases. But I wonder if is it a real risk to do you think?

How are you thinking about it? So I look at what has really resulted in the rise of the SG investing, and it's UM the continued UM demand we've seen from a BOLT in a retail client perspective, but also institutional clients. UM. It is the economic argument for it when you've seen this massive rise of intangibles on balance sheets. You look at the amount of intangibles on balance sheets in thenteen seventy five which just seventa the last figures and were over twenty UM or over N. But I think the

biggest thing is the policy environment. So according to the u N Principles for Responsible Investing, the top fifty out of the top fifty economy have some form of policy designed to help investors consider sustainability, risks, opportunities and outcomes UM. And for the long longest time, the US was the outlier UM in terms of policies that we're providing kail winds were sustainable investing UM and and now we we

may become the outlier again. However, what we're seeing happening in the rest of the world, particularly Europe, is going to continue to provide kail winds UM. Interestingly this week and there's a lot of conversation about the SEC and their climate disclosures that the EU UH has actually vary quietly.

UM reached a provisional agreement that we require UH non EU they companies with later million euros of a u M to have provide report on their E s G impacts UM and it's it's defined and it's going to be legally mandated for US company persons over there. Yeah, especially on this, I do feel like we're looking largely to Europe in terms of what they're doing. It does feel like though a moment of reckoning when it comes to UH impact investing, and I think investors are increasingly

demanding it. Sara, we scratched the surface. Hopefully we can continue this conversation in the future. I know it's something we talked about a lot here at Bloomberg. Sarah Bratton Hughes, She's head of E, s G and Sustainable Investing at America American Century Investments, joining us on the phone from New York City. I mean, like the amount of money. I think Bloomberg Intelligence expects something like fifty trillion by so yeah, I mean it just keeps coming