When it comes to responsible investing, institutional investors and larger funds can face inertia thanks to the sheer volume of demands and expectations. However, retail investors can avoid being sucked into “greenwashed” products that cater to the lowest ESG-aligned (environmental, social and governance) denominator by focusing on the impact of their investments, WHEB Asset Management’s Ted Franks recently told Nest Egg.

“There is this increasing use of this idea of impact, which is one step beyond ESG,” he said.

He said that while it’s tricky for larger investment products and firms to deliver responsible investment solutions, the ability for these groups to “get away with BS” is limited when faced with investors genuinely interested in impact, rather than ESG investments.

However, the semantics of the issue are where investors may stumble, Morgan Stanley’s head of wealth management research Nathan Lim recognised in a recent BetaShares briefing.

Mr Lim said the point he most wanted to get across to investors was the distinction between restrictive, ESG and impact investing.

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