This recap of Tideline’s Compass Series event on public equities as a focus for impact investors was written by Dmitriy Ioselevich and Yael Cohen. Watch the full recording here.


Pursuing impact in public equities remains something of a quandary.

On the one hand, given that impact investing is commonly defined as requiring a high degree of impact intentionality, contribution, and measurement (see Tideline’s “Truth in Impact” whitepaper), some question the extent to which it is possible in liquid public equities strategies to: a) target specific social or environmental outcomes, b) provide differentiated capital and influence, and c) access the data essential to tracking performance.

On the other hand, public equities as an asset class is too big to ignore in the race to address urgent social and environmental challenges. According to the Boston Consulting Group, public equities account for 40% of all managed assets, more than any other asset class. And investors with public equities strategies are increasingly confident in the viability of their approach to advance targeted impact outcomes.

A recent Compass Series conversation explored this dichotomy, featuring leaders in impact investing from BlackRock, Coeli Circulus, the Global Impact Investing Network (GIIN), UBS Wealth Management, and Wellington Management. Panelists were invited to share their perspectives on whether it’s time to elevate public equities in the impact consciousness.

It all starts with clarity of intentionality

In 2019, GIIN formed the Listed Equities Working Group after its Investor Survey identified listed equities as one of the fastest-growing asset classes for impact investing. The purpose of the working group was to assess how funds targeting the listed equities asset class could approach delivering “impact” as an objective, the findings of which were recently published in Guidance for Pursuing Impact in Listed Equities. Sean Gilbert, GIIN’s Chief Investor Officer, highlighted several key elements of the guidance, including the importance of clearly articulating an investor’s impact goals and explaining how specific investment products contribute to progress on those goals. Gilbert noted that developing a theory of change that clearly states what the investor can expect the fund to deliver as an impact return is a crucial step in this process. Doing so would then “allow the fund manager to develop a theory of change for how the economy needs to move from A to B, which can then be used to help develop the subsequent steps from portfolio construction, designing engagements, monitoring performance, and delivering on the overall outcomes of the fund,” he added.

Andrew Lee, Chief Sustainability Officer of UBS Wealth Management, said the bar for labeling a public equities strategy as “impact” should be just as high in public equities as in any other asset class. Lee argued that expectations should not be different across asset classes if the end objective of an investment is essentially to deploy capital in an intentional way to target and drive measurable environmental or social outcomes. Emphasizing that the market has evolved in terms of tools and practices, Lee further added that a fund must incorporate intentionality, a theory of change, and investor contribution – along with considerations of how a particular strategy is driving the impact that a fund intends and the investor is looking for – and how the impact is measured and managed through the holding period. “If you are not considering or incorporating those into your practice, I think that’s a failure,” he said.

Good data and measurement are key

Regarding potential challenges in public equities impact investing, the GIIN identified the difficulty of collecting and assessing impact data, since the growing volume of standard disclosures in public markets tends to focus on policies, practices, and other ESG data rather than impact-related outputs and outcomes. Speaking on the issue, Oyin Oduya, Impact Measurement and Management Practice Leader of Wellington Management, shared Wellington’s efforts to design and implement a robust data gathering, management, and reporting strategy. According to Oduya, “the point of impact measurement and management isn’t to get perfect data, which often doesn’t exist; instead, “the point is to get good enough data supported by a strong evidence base to influence investment decisions and engagement credibly, and ultimately to drive real-world outcomes.”

Investor practices for contributing to impact are improving

Panelists were also asked to discuss the different ways in which managers can improve impact in public equities. Many saw investee engagement as the key path to impact performance, where investor contribution can be demonstrated via a theory of change and intended impact outcomes. As a best practice, managers should (1) embed impact objectives into their decision making and (2) link compensation to impact realization to ensure that an investment’s objectives deliver on financial performance as well as progress on impact.

Another driver of the pressure on public equities managers to improve their impact management practices is regulation. While the international regulatory environment on ESG and impact is still very much in development, BlackRock’s Quyen Tran, who serves as Director of Impact Investing & Head of Sustainable Investing for Fundamental Active Equities, believes that “regulatory scrutiny will help asset managers evaluate whether there’s room for improvement in their own processes,” creating a “feedback loop that’s really healthy and vital for any impact investment practice to improve.” When it comes to public equities in particular, Tran pointed to existing impact investing frameworks and standards and the potential for a “back and forth that will take place for alignment” in terms of establishing a baseline of market expectations. 

Differences and similarities across asset classes

Another topic of conversation was the differences and similarities when it comes to driving contribution in private versus public markets impact investing strategies. Wellington’s Oyin Oduya said that having worked in both public and private market impact investing, she has been “pleasantly surprised to have seen a very similar amount of rigor,” adding that “very often people want to talk about the differences, but we need to bear in mind that the overall goals and frameworks are similar.”

Other speakers echoed this sentiment of similarities across asset classes. Tran said that at BlackRock, “we’ve developed a minimum criterion for impact investing that applies to all asset classes as there has to be the same rigor across all asset classes.” Simon Park, Co-Founder of Coeli Circus, also offered his perspective based on investing in micro and small-cap companies. While these investments can be quite different from investing in large-cap public companies, Park feels “a lot of the impact mechanisms are probably closer to what [managers] are doing in private markets,” particularly around the potential for strong investor engagement and contribution.


While challenges remain, the panel concluded that the time is right to elevate public equities as a focus for impact investors, for which Lee said “we have the frameworks and tools in place.” However, the market also needs a mechanism “to match investors in the public space with companies that have moved through private market impact funds so that they land with the right owners once they go public,” said Gilbert. Meanwhile, Tran sees opportunities for both asset owners or practitioners who believe in the impact mechanism as a tool to effect change, especially when impact investing is well-executed and consistent with an investor’s theory of change. If acted upon with intentionality and honesty, these developments in the public equities space can allow the impact investing market to grow with integrity.