A guide to investing for sustainability impact: drawing on the findings of Legal Framework for Impact

In November 2024, UN Principles for Responsible Investment (PRI) created a guide for asset owners and investment managers, explaining how they can leverage the investing for sustainability impact (IFSI). The guide is built on the findings of Legal Framework for Impact (LFI), a report authored collaboratively by the PRI, UNEP FI, the Generation Foundation, and Freshfields Bruckhaus Deringer.  

Key takeaways for boards: 

• Legal frameworks across jurisdictions increasingly require or permit investors to consider sustainability impacts in their decision-making, making it a crucial governance consideration. 

• Boards need to understand that addressing systemic risks (like climate change) through sustainability impact strategies may be necessary to fulfil their fiduciary duties and protect long-term portfolio value. 

• The report provides a practical four-part framework (determine intention, set goals, take action, measure progress) that boards can use to oversee sustainability impact integration into investment strategies. 

• Directors should be aware that stewardship activities and policy engagement are becoming critical tools for managing sustainability-related risks and opportunities, often requiring dedicated resources and long-term commitment. 

• The report highlights emerging challenges in implementing sustainability impact strategies, including fee structures, intermediation chain complexity, and measurement issues, which boards need to consider in their oversight role.