Sustainable futures for family offices 

Historically, single family offices largely kept investing in assets to generate financial returns while contributing to philanthropic causes as a means of ‘doing good’ as independent activities.  Philanthropy, often facilitated through separate family foundations or direct donations to charities, was seen as the primary avenue for creating change in the world. 

However, the landscape has undergone a transformation, with the proliferation of solutions that allow family offices to realize philanthropic objectives through their investments. This significant shift towards impact investing highlights growing momentum behind the idea that meaningful change can potentially be achieved through investment allocations, alongside traditional grant-making activities.

Impact investing is an investment approach that aims to generate positive social and environmental impact. It focuses on targeting underserved areas, seeking to address poverty, inequality, climate change, and environmental degradation. Impact investing incorporates intentionality, measurability, and financial returns, with a focus on impactful products and services, systems-thinking, targeted outcomes, and recognized sustainability frameworks like the UN Sustainable Development Goals (SDGs). By applying these additional lenses to the investment process, impact investing goes beyond traditional sustainability-themed strategies and may offer opportunities for families to make a material difference while achieving their financial goals.

Impact investing is gaining traction  because investors recognize the interconnection between our economic systems and social and natural ecosystems. It considers both the positive and potential negative impacts on people and the planet, with investors able to direct capital towards initiatives that address global challenges.

The World Economic Forum's Global Risks Report 2025 highlights these risks. However, the UN's recent progress report on achieving the SDGs reveals significant gaps and challenges. Impact investing, with its targeted measurement-based approach, has the potential to address a wider range of SDG gaps and report on its contributions effectively. The opportunity set for impact investing is substantial and growing, with over 3,907 organizations managing $1.571 trillion in impact investments globally^[1]. Closing the financing gaps for the SDGs may require private sector involvement, making impact investing a necessary tool for creating positive change.

We believe that emphasizing the role of family legacy within the overall vision and strategy is one of the best ways to maximize the effect of impact investing. Involving children and grandchildren in impact investing activities instills important values and helps ensure the family's commitment to making a positive difference continues into the future. Family members can expand their knowledge and learn from successful impact investors by participating in workshops, events, and roundtables dedicated to impact investing, which may be invaluable in shaping their understanding and approach. Additionally, integrating a family narrative into the overall governance framework can strengthen family cohesion across generations and may improve succession planning. 

By creating a shared purpose through a legacy of impactful investing, family members can develop a sense of unity and common goals. This approach may not only mitigate conflicts, but also enhances communication within the family, fostering a collaborative and supportive environment. This inclusive approach helps ensure the sustainability of impactful investments and can create a legacy that spans generations.

Impact investing approaches are implemented by considering three key areas:

1. Impact intentions and themes
2. Portfolio allocation and implementation options
3. Impact measurement and reporting

Investors can identify and prioritize themes based on their impact investment perspective, including the environmental and social themes most important to them and their overall investment objectives. Under the environmental category, themes such as climate change are common, with growing interest in nature-based solutions and resource stewardship. These themes address areas like transitioning to sustainable energy, preserving biodiversity, and adopting circular-economy models. In the social category, themes focus on basic needs like affordable housing, as well as well-being, empowerment, and equality, targeting areas such as financial inclusion, education, healthcare, and entrepreneurship. These themes can be mapped to the UN SDGs to align with the metrics and targets of each goal. However, not all SDGs are directly investable or easily translated into products or services. 

Within impact investment, we take a two-step approach when it comes to manager selection. First, we take a deep dive into how the manager measures impact, work out who is going to benefit from it and find out what risks accompany it. The second part requires impact mapping. This means looking at the impact at every level, including on a sector-wide basis and country level, to capture the positive and negative effects that managers are achieving through their investments.

We recommend that family offices begin by assessing the following areas: 

• Their impact goals and aspirations
• Their current level of exposure to impact investing
• Their capacity to track and report on the outcomes of their impact initiatives.

We believe, impact investing holds great promise in generating positive social and environmental outcomes. With the advent of improved standards, technology, and reporting mechanisms, family offices have greater ease in measuring and evaluating the effectiveness of their impact projects.