The World Economic Forum hosted the first in-person meeting of the Global Learning Exchange (GLE), alongside the World Economic Forum Latin America summit in Panama City. The GLE meeting, titled “Investing for Impact in Latin America,” was an engaging discussion on the potential of forging cross-sector partnerships to scale innovation for greater social inclusion and impact.
In his opening remarks, Ricardo Martinello, President of Panama, emphasized the need for foregrounding social inclusion, as he outlined Panama’s social and infrastructure priorities. David Aikman, Managing Director, Head of New Champions, World Economic Forum, highlighted the potential that social enterprise and impact investing had in addressing complex social challenges in Latin America and globally.
The opening session of the GLE focused on the role of multilingual leadership in scaling social innovation. Led by Julie Katzman, Executive Vice President of the Inter-American Development Bank, the session featured a rich exchange of perspectives from founders of two leading social enterprises operating in the region – Donn Tice of d.Light design and Felipe Vergara of Lumni – along with Senator Juan Merio Laserna from Colombia, Leo Schlesinger of Masisa Mexico, and Alfredo Tivera, who leads the Latin Center Business Unit of Coca Cola. Four ideas were discussed as being key to achieving scale and impact: the importance of partnerships across sectors and the social investment ecosystem; promoting innovation in models of financing; the role that the operating environment plays, including the touch points where government could help; and lastly, the importance of design in creating a social enterprise.
In keeping with the GLE objectives of facilitating action-oriented conversations, the afternoon breakout session allowed the meeting participants to draw on their collective expertise to discuss innovative approaches for harnessing private capital for social good in the Latin American market. Led by the GLE Director Rosemary Addis, the objective of this session was to workshop in smaller groups to identify concrete steps that could be taken to build an action agenda to scale impact investing and social innovation.
The four breakouts focused on: infrastructure and policy development for market growth; opportunities to scale; financing social entrepreneurship, and raising capital to support SMEs, social enterprises and civil society organizations. The discussion groups were led by four leading investor voices in the region – Antonio Moraes Neto (Vox Capital), Mario Marconi (UBS), Carl Muñana (Inter-American Investment Corporation), and Alvaro Rodriguez Arregui (IGNIA).
One of the breakout groups in session with discussion leader Mario Marconi
The breakout groups highlighted some common themes that could be part of an action agenda to scale impact investing in Latin America, and bridge the divide between demand and supply actors. Interestingly, most of what was discussed focused on increasing the supply or promoting more effective use of capital in the market. These themes included:
- Education: increasing levels of awareness about the potential impact of, and opportunities for, impact investing – among investors in the public and private sector. Some participants even recommended the need for educating fund managers in particular – since they play a valuable role in market building.
- Spotlighting success stories and track record: is important not just to increase awareness about the field, but also attract more interest and investment towards social enterprises. The media and civil society actors have an important role to play in this process, along with impact investing practitioners themselves.
- Showcasing best practice: To provide a deeper understanding of “what works” and action steps to take – in the form of case studies, or even a platform showcasing current deals. This provides new entrants to the impact investing market with critical know-how on financial and technical models to take their work forward.
- Matching capital to recipients: Capital exists in the market, but there is a mismatch between the capital that is available and what it can be used for. Forums or platforms that can certify or standardize performance could play a useful intermediary role.
- Reducing entry barrier: For new impact investors, who are more risk averse and often not familiar with risk reducing tools in the market, providing some sort of capital loss guarantee or similar mechanisms could be valuable.
The dynamic conversation provided an inspiring conclusion to the GLE meeting, encouraging participants to think about action-oriented frameworks to accelerate market development in the region. Keeping with the objectives of the GLE – to find local applications of global practices – this meeting provided a valuable forum to explore collaborative approaches to advance impact investing in Latin America.
Join the GLE Webinar “Social Enterprise in Latin America: Takeaways for Success” on April 28 to hear first-hand experiences from social investment practitioners in the region and relevant takeaways for the global impact investing market.