3. Impact data
Many family offices are responding to a growing trend towards responsible investment. Families, especially those with next-generation leadership, are placing a higher priority on ESG (Environmental, Social and Governance) factors as stakeholders, investors, regulators and the public demand more transparency and accountability from businesses in terms of their contribution to society and their impact on the world. For businesses across the globe, mandatory impact reporting standards are fast approaching and family offices, as major asset holders, will need to improve the monitoring and reporting of their own impact.
Many family offices are now introducing impact KPIs to measure, track and report progress. A good impact-measurement framework will clarify what kind of impact you want to achieve, the challenge it addresses, who or what benefits from your activity/investment and will set specific metrics aligned to your impact objective. In order to report the true impact and outcomes of your activity, accurate and timely data is essential. Some family offices employ manual methods to cover a few core issues while others prefer customised software solutions for automating the collection of ESG data from multiple sources including company reports and ESG data and ratings providers.
For those family offices that are not currently required to report on responsible investing, there is a good chance they will be asked to in the future and should be prepared.