Together with colleagues from Eurosif's SRI Study Group (SSG), the Sustainable Finance Research Group (SFRG), and Advanced Impact Research (AIR), Prof. Dr. Timo Busch developed a new methodology for market studies on sustainability-related investments.
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. The new methodology aims to address this gap by categorizing investments into four distinct levels of ambition for actively contributing to the transition towards a sustainable economy: Basic ESG Investments, Advanced ESG Investments, Impact-aligned Investments, and Impact-generating Investments.
Central to the new approach is the differentiation between company impact and investor impact, acknowledging that sustainable investments can influence real-world change either directly through companies or indirectly through investor actions. This distinction aims to provide greater transparency regarding how capital flows support sustainability objectives and align with regulatory goals such as those outlined in the EU Sustainable Finance Disclosure Regulation (SFDR).
The development of this methodology involved collaboration with industry experts and practitioners throughout Europe and will be implemented gradually, with the first market study expected in 2025.
To read the full IPE viewpoint by Prof. Dr. Busch and Will Oulton, Chair of Eurosif, informing about the new methodology click here.
The final report on the new Methodology for Eurosif Market Studies on Sustainability-related Investments can be accessed here.