Research collaboration between Builders Vision, Tideline and BlueMark highlights the impact of fixed income investments
Despite its status as the world’s largest asset class, fixed income is rarely thought of as a vehicle for social or environmental impact. A new research collaboration between Builders Vision, Tideline and BlueMark presents impact investing in fixed income (or “impact fixed income”) as an accessible and attractive means of generating positive impacts for people and the planet, without any financial trade-off.
The authors of a new paper, “Scaling Solutions: The Fixed Income Opportunity Hiding in Plain Sight,” argue that impact fixed income is a rapidly growing asset class with predictable and comparable financial returns to traditional fixed income investments. The authors also found that interested investors can navigate this new asset class using existing impact investing concepts, frameworks, and standards. The full paper, along with practical resources for institutional asset owners, is available at www.tideline.com/impact-fixed-income
According to the research, there are several features of the fixed income asset class that make it ideally suited for impact, including its:
- Responsiveness – capacity to rapidly mobilize capital to address our most urgent needs, such as responding to natural disasters and pandemics
- Scale – ability to bring in unparalleled levels of capital to bolster, enhance, or transition social, environmental, and economic systems, such as through funding corporate climate transition efforts or national affordable housing campaigns
- Precision – capacity to generate targeted and specific impacts, including through localized, place-based initiatives
There is also evidence of strong demand for an impact approach within fixed income.
- Fixed income is already the dominant asset class for the select group of institutional asset owners that responded to the GIIN’s 2024 Impact Investor Survey, representing 44% of their total AUM, demonstrating what’s possible to peers.
- The global sustainable bond market has been resilient, consistently adding $1 trillion in new issuance each year and soon set to exceed $6 trillion in cumulative issuances even amidst turbulent economic conditions.
- According to Bloomberg estimates, total energy transition debt issuance reached $1.01 trillion in 2024, relative to $50.7 billion raised for climate-tech equity.
Taken together, these data points signal the importance of establishing a shared understanding of best practices within impact fixed income as well as providing a roadmap that investors can use to better define and refine their approaches.
Taxonomy of impact fixed income
The impact fixed income market benefits from a strong infrastructure that enables investors to confidently balance profit and purpose. A bond labeling regime defines what meaningful and authentic impact looks like at the issuance level, supported by voluntary standards such as International Capital Markets Association’s (ICMA) green, social, and sustainability (GSS) bond principles and the European Union’s (EU) Green Bond Standard. There are also fund labeling regimes in the EU (Sustainable Finance Disclosure Regulation) and UK (Sustainability Disclosure Requirements) that are intended to address greenwashing concerns and differentiate between a range of sustainability objectives.
Building on these frameworks, the research paper proposes a new taxonomy for impact fixed income strategies to make it easier for investors to define and categorize their approach.
- Responsibility-focused – Securities are selected, managed, and measured based on an issuer’s commitment and accountability to responsible business practices.
- Impact-aligned – Securities are selected, managed, and measured based on their revenues and/or Use of Proceeds’ (UOPs’) contribution to addressing widely accepted social and environmental challenges.
- Impact-centered – Securities are selected, managed, and measured based on revenues and/or UoPs’ contribution to advancing an investor’s own specific and well-evidenced impact strategy.
In stressing the urgency of activating the fixed income market for impact, the report also offers several practical resources for institutional asset owners. These include six in-depth case studies of leading asset managers’ approaches to impact fixed income – featuring Community Capital Management (CCM), EdenTree, Nuveen, Schroders, T. Rowe Price, and Wellington Management – as well as a series of actionable resources that allocators can use to scale up investments in impact fixed income now.
Noelle Laing, CIO of Builders Vision: “For many allocators and asset managers, the connection between bonds and investing in resilience remains opaque. The perception persists that fixed income is solely an asset class for risk mitigation and yield; it’s not solutions-oriented. Yet fixed income has always been the asset class of choice for scaling and sustaining proven projects, products and services — or, in other words, solutions you can count on. Fixed income is not only good for diversification, its steadfastness, and its predictability. It has the attributes that make the asset class an ideal anchor for any portfolio investing to build a future that’s resilient and prosperous.”
Ben Thornley, Managing Partner and Co-Founder of Tideline: “The overlooked opportunity in impact fixed income is so significant that, once unlocked, it could double or even triple the current size of the impact investing industry. We believe the key to harnessing this multiplier growth is twofold: first, elevating fixed income’s unique attributes as a driver of impact; and second, showing asset owners that impact opportunities in the asset class are readily available, if not already part of their portfolios.”
Sarah Gelfand, President of BlueMark: “Our assessments of how fixed income investors approach impact investing shows a high degree of alignment with existing industry frameworks and standards. This suggests that these long-standing impact investing concepts can support the institutionalization of impact fixed income, enabling investors to rapidly scale up their allocations with confidence.”
About Builders Vision
Builders Vision is a team of investors and philanthropists accelerating tomorrow’s most promising solutions across food and agriculture, energy, and oceans. By deploying capital from grantmaking to market-rate investments, we aim to maximize financial returns and lasting impact. We are diversified and risk-aware, ensuring our investments balance both financial growth and long-term sustainability.
A more resilient future for investors, communities, and the planet requires harnessing the collective power of innovation, capital, and collaboration. We work closely with leaders and visionaries at the cutting edge of sustainability. At the heart of everything we do are our partners — the entrepreneurs, advocates, scientists and co-investors — who are closest to the solutions that will transform industries and achieve lasting impact.
About Tideline
Since its founding in 2014 as a women-owned consulting practice, Tideline has worked with over 150 investors and market builders to catalyze the development of the impact investing market and grow its integrity. Tideline’s thought leadership has encompassed the full spectrum of capital. Tideline’s work has included defining the term “catalytic capital” in partnership with the MacArthur Foundation, creating a framework for the classification of institutional impact strategies, and the development of new impact lenses. Tideline’s work has led to the creation of new products and platforms deploying over $200 billion in impact capital globally.
About BlueMark
BlueMark is a leading independent impact verification and intelligence provider for the impact and sustainable investing market. As a certified B Corp, BlueMark’s mission is to strengthen trust in impact investing by equipping investors with impact verification services, benchmarks, and analytics. BlueMark’s verification methodologies draw on a range of industry standards, frameworks, and regulations, including the Impact Management Project (IMP), Impact Performance Reporting Norms (Reporting Norms), Operating Principles for Impact Management (Impact Principles), SDG Impact, Sustainability Disclosure Requirements (SDR), and Sustainable Finance Disclosure Regulation (SFDR). At the time of the publication of this report, BlueMark has completed more than 306 verifications for impact investors managing a combined $393 billion in impact-oriented assets. Learn more about BlueMark and impact verification at www.bluemark.co.