THE BASICS

The power and meaning of impact investing

One fifth of the world’s children still have inadequate schooling- and this is just one of a number of challenges facing the world.

The right investment vehicle can make a measurable impact on the problem- while also delivering growth.

When lockdown started, parents everywhere suddenly found themselves stepping into the role of teacher and no doubt muttering a prayer of thanks for online learning tools. 

Education is vital to all our futures. It’s the key to increasing social mobility and escaping poverty. But the system is far from perfect. According to the United Nations (UN), a staggering 258 million children were still out of school in 2018, nearly one fifth of the global population in that age group.[1] With the world’s population growing rapidly, there will be more and more children and adults in vital need of education to improve their life prospects.

Huge investment is needed to build the right tools and infrastructure, particularly in the developing world. And this is where anyone can put their savings to work, buying into areas with a positive development goal that also has huge growth potential.

The global e-learning industry alone which is only one strand of education infrastructure was worth $107bn in 2015 and is predicted to grow to $325bn by 2025, largely fuelled by the massive expansion of demand in Asia.[2]

Huge investment is needed to build the right tools and infrastructure, particularly in the developing world. And this is where anyone can put their savings to work, buying into areas with a positive development goal that also have huge growth potential.

Of course, education is only one of a number of vital challenges facing humanity as the planet’s population expands and the effects of climate change take hold. The United Nations has outlined 17 areas that all need to be addressed. Known as the Sustainable Development Goals (SDGs[3]), these form a framework for areas that can be targeted by investors looking to do some good while also putting their savings to work in areas of future growth.

Beyond education (goal four), goal six targets water availability and sanitation for all. Even before the Covid crisis, billions still lacked water and sanitation services: 2.2 billion people lacked safely managed drinking water, while 4.2 billion people lacked safely managed sanitation, according to the latest available figures.[4]

Goal two targets an end to hunger. Among many shocking statistics highlighted by the UN, 47 million children under five- 6.9% of those in the world- are affected by wasting through lack of nutrition.[5]

All of these are areas that can be improved through targeted investments, and Amundi operates a range of funds that aim to make a tangible difference, based on different SDGs.

Elodie Laugel, chief responsible investment officer at Amundi, says: ‘The SDGs provide shocking insights into the challenges we all face, and which we at Amundi feel must be addressed. They also give a valuable framework for investors who want to target specific issues with their savings. Several Amundi’s funds covers a number of SDGs- Education, Food and Water being just three examples. We aim to show investors a concrete impact from these funds, while also helping them to achieve their investment goals.’

Sources:

[1] UNESCO UIS Fact Sheet No. 56, September 2019.
[2] https://www.forbes.com/sites/tjmccue/2018/07/31/e-learning-climbing-to-325-billion-by-2025-uf-canvas-absorb-schoology-moodle/#1bbb8d5c3b39
[3] For more information see https://sdgs.un.org/goals
[4] https://www.un.org/sustainabledevelopment/wp-content/uploads/2016/08/2_Why-It-Matters-2020.pdf
[5] https://www.un.org/sustainabledevelopment/wp-content/uploads/2016/08/2_Why-It-Matters-2020.pdf
https://www.forbes.com/sites/tjmccue/2018/07/31/e-learning-climbing-to-325-billion-by-2025-uf-canvas-absorb-schoology-moodle/#1bbb8d5c3b39 

IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 August 2020. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.

Date of first use: 9 October 2020

Doc ID# 1357227

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