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Laxman Pai, Opalesque Asia:

Institutional investors risk a disconnect between ambition and reality if they focus on measuring investment impact without explicitly linking it to value creation for stakeholders, The Thinking Ahead Institute (TAI) warns.

TAI, which is a non-profit division of Willis Towers Watson, also warns that asset managers need to be more realistic about what is achievable in terms of delivering a more sustainable economy.

"Most investors tend to focus on the measurement of their impact but stop short when translating this into an evidence-based narrative that clearly explains how these sustainability metrics translate into value and outcomes for each stakeholder. Critically this should also include future expectations that can inform investors' deployment and stewardship of capital," said Marisa Hall, co-head of the Thinking Ahead Institute.

The report sets out five key steps to help investors understand and communicate their value creation activities - define your purpose and document your beliefs; draw your value creation boundaries; measure your impact; understand the value created, and communicate.

"Historically, articulation by the investment industry of value creation linked to purpose and impact has been poor. But this is changing as stakeholders increasingly expect authentic, intentional, and transparent communication of the value they can expect now and prospectively. While challenging, we believe this can be achieved by using the i......................

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