US SIF Foundation Releases Guide for Family Offices on Investing for Impact

Led by millennials, sustainable, responsible and impact investing is growing;
Report recommends families appoint a “champion” for SRI  

A growing number of family offices in the United States are exploring ways to invest for impact, according to a report released today by the US SIF Foundation  entitled Family Offices and Investing for Impact: How to Manage Wealth, Expand Legacies and Make a Difference in the World.

While public data on family offices is limited, the report, drawing on interviews with family offices and other industry professionals,  cites the anecdotal evidence that family offices are making more frequent inquiries to family office membership associations, financial advisors and consultants about sustainable, responsible and impact investing (SRI).

Approximately 3,000 family offices exist in the United States, and their collective assets under management are estimated at $1.7 trillion. Based on US SIF interviews, however, there is no definitive data on how many of these family offices practice SRI.  In 2014, family offices representing $22 billion in assets under management, a relatively small sample, provided information for the US SIF Foundation's biennial survey of SRI trends in the United States.  They indicated that $1.5 billion of their assets under management took into account environmental, social and corporate governance factors.

According to interviews, family offices that invest for impact are motivated by the families' values, including the growing influence of members in the millennial generation.  In addition, family offices are becoming aware of a growing body of evidence that investments that take into account environmental, social and governance indicators achieve comparable or even better financial returns than conventional investments.  Furthermore, the growing availability and variety of SRI investment options and the positive influence of family offices that have been pioneers in SRI investing is encouraging additional families to explore investing for impact.

Brief profiles of nine single family offices and multi-family offices, highlighting investment strategies, sectors of interest as well as their motivations for investing for impact, are also featured in the report.  The report found that sectors of interest are diverse, with environmental issues figuring prominently.  Other sectors mentioned by interviewees include human rights, supply chain issues, local and community investing, sustainably grown food, and technology innovators that advance social and environmental progress.

The report offers recommendations and resources for family offices to get started in sustainable, responsible and impact investing across different asset classes.  It suggests that family offices:   
  • Identify and appoint a “champion” within the family who is interested in exploring investing for impact and can encourage family members to discuss their goals, values and specific social, environmental or corporate governance concerns;
  • Review studies on the financial performance of sustainable investments to see how they compare with conventional investments;
  • Engage financial professionals with expertise in sustainable, responsible and impact investing; and
  • Take advantage of educational resources on sustainable and impact investing, such as online and live courses, reports, conferences and networks.

“This report captures the ‘buzz' about investing for impact among family offices, which is definitely on an upswing, thanks in part to the interest of millennial generation members,” said Lisa Woll, CEO of US SIF and the US SIF Foundation.  “Our guide highlights a number of family offices that have made the commitment to utilize their investment assets for positive social and environmental impact.  We hope that the recommendations and resources provided in this report will motivate many more family offices to follow their example.”   

The US SIF Foundation is a 501c3 organization that undertakes educational, research and programmatic activities to advance the mission of US SIF.    The Foundation houses the Center for Sustainable Investment Education, which serves the growing need of investment professionals in the United States to gain expertise in the field of sustainable, responsible, and impact investment.  The Center provides education, research and thought leadership on sustainable investment to investors, investment advisors, consultants and analysts. Online and live versions are offered of the Fundamentals of Sustainable and Responsible Investment, a resource for investment advisors, financial planners and other financial professionals. 

US SIF: The Forum for Sustainable and Responsible Investment advances sustainable, responsible and impact investing across all asset classes and a wide range of environmental, social and governance issues.  US SIF members include investment management and advisory firms, mutual fund companies, research firms, financial planners and advisors, broker-dealers, community investing organizations, nonprofit associations, and pension funds, foundations and other asset owners. Learn more at