06 November 2025
The October 2025 report Impact Investing: Guidance for Designing Listed Equity Strategies That Generate Real‑World Outcomes, authored by Nicole Gehrig, Chris Fidler, Deborah Kidd ,CFA, and Bruno Bertocci, and published by the CFA Institute Research and Policy Center, confronts a critical challenge facing the impact investing industry: how to translate well‑intentioned capital in public equities into measurable real‑world outcomes. 
Key insights
While private‑markets impact investing often relies on concentrated stakes and direct governance, listed‑equity investing is structurally different – ownership is dispersed, influence is limited, and achieving tangible change is harder. The report argues that for listed‑equity strategies to be genuinely “impact”, they must satisfy two core criteria:
- A credible Theory of Change – a clear linkage from investor action through company behaviour to social or environmental outcome.
- Active investor role – not simply buying “good” companies, but engaging, stewarding, influencing outcomes. 
The report emphasises that simply investing in companies with positive business models (renewables, affordable housing, health‑tech) without accompanying engagement efforts tends to fall short of true impact. 
Designing for Impact: what practitioners must consider
The report lays out several design implications for asset managers and advisors:
- SMART objectives: impact goals should be Specific, Measurable, Affect people/planet, Realistic and Time‑bound.
- Engagement & stewardship as primary mechanisms: for listed equities, the driver of change is less capital allocation and more active shareholder influence.
- Portfolio design trade‑offs: an impact‑oriented portfolio often requires fewer companies; greater concentration; willingness to diverge from standard benchmarks; and acceptance of higher tracking error.
- Benchmarking and performance measurement: standard market indices may not be appropriate. Alternative frameworks (absolute return targets, custom benchmarks) better align with impact‑goals timelines.
- Legal/regulatory risks: using “impact” labels without proper backing may invite mis‑representation risk. Clear disclosures and alignment between words and actions are essential. 
Relevance for Italian investment professionals
For members of CFA Society Italy – whether asset managers, institutional advisors or portfolio strategists – the report offers actionable value. Italy’s evolving regulatory context (e.g., EU‑SFDR, MiFID updates) and growing investor demand for sustainability mean that listed‑equity impact strategies must be designed with rigour to fulfil both fiduciary and impact mandates.
- Italian firms advising on ESG or impact mandates will benefit from this framework to differentiate “impact” from broader “sustainable” or “thematic” labels – offering clarity to clients.
- Institutional investors (pension funds, insurance companies) engaging listed equity may need to rethink governance, stewardship capabilities and resource allocation if they genuinely intend to produce outcomes rather than just positive business themes.
- Portfolio teams working in listed equity can use this as a guide to evaluate trade‑offs between financial return expectations, diversification norms and the longer time horizons required for meaningful impact.
- For client‑facing advisors, understanding these structural issues – SMART objectives, engagement intensity, benchmark divergence – enables more sophisticated conversations about what “impact” really means and how it is achieved.
Conclusion
In the shift from “ESG” to “impact”, public markets pose unique structural challenges. The report from CFA Institute elevates the discourse from intent to execution. For Italian investment professionals, this is not simply another sustainability whitepaper – it’s a roadmap for designing listed equity strategies that strive to deliver measurable change. Adopting its principles can mark the difference between labelling a fund “impact” and building one that truly creates it.