Impact investing is about a very simple, progressive idea: markets and money for good. Impact investing is built on the belief that financial tools can play a powerful role in solving the massive global challenges of our day, and that capital markets should work for good as well as profit. This vision is realized through investments made into companies, organizations, and funds with the intention to generate measurable social and environmental impact alongside a financial return.
Every month, PCV will give you a roundup of what’s new in the field, what conversations are taking place, and how you can get involved. Here are some highlights from late September the end of October:
Recaps From The OFN Conference
The Opportunity Finance Network (OFN) — whose mission is to lead Community Development Financial Institutions (like PCV) and their partners to ensure that low-income, low-wealth, or other disadvantaged people and communities have access to affordable, responsible financial products and services — held their annual conference this past month in Denver. Several PCV staff members were in attendance, and spoke at the conference.
There was robust discussion about an ideological struggle: are CDFIs a movement or an industry? The CDFI business model as a whole can be improved, and there’s enormous work to do when it comes to inclusion, sustainability, and economic justice. What does this mean for a CDFI like PCV? Read our Managing Director’s take. And what was OFN 2014 like through the eyes of a first-timer? Ask our Director of Lending!
Funders, Investors, and Big Data
OFN’s new CDFI Coverage Map helps measure CDFI coverage — where CDFIs are located, where they’re providing financing and other services, which financing sectors they are serving — and how these change over time. The hope is that this information will inform CDFI industry expansion strategies; enable policy changes based on market need; and help lenders and investors maximize the use of their resources.
On that theme, there’s a great new tool from LIIF: the Social Impact Calculator. It’s a first-of-its-kind tool that allows users to estimate the social impact of their investments in dollars — providing a new way to assess how effective an investor or fund is in creating pathways of opportunity in low-income communities.
SBA Expands Its Impact Investment Fund
The U.S. Small Business Administration (SBA) announced that they’re expanding the Impact Investment Fund, a feature of the Small Business Investment Company (SBIC) Program. The SBA is implementing a series of policy changes that promise to broaden access to the fund and strengthen the impact of SBIC’s.
The SBA launched the Impact Fund in 2011 as a five-year, $1 billion pilot initiative to capitalize investment funds that seek both financial and social return. This announcement reaffirms the agency’s allocation of roughly $200 million of its $4 billion annual investment authority to Impact SBIC’s investing in underserved areas and sectors of national priority.
A New Green Bond From The World Bank
What kinds of projects are supported by World Bank Green Bonds? Renewable energy installations, energy efficiency projects, and new technologies in waste management and agriculture that reduce greenhouse gas emissions and help in the transition to a low-carbon economy.
So it’s great news that the World Bank has issued a new Green Bond to raise $30 million in funds for projects seeking to mitigate climate change or help affected people adapt to it. They also include financing for forest and watershed management and infrastructure to prevent climate-related flood damage and build climate resilience.
Change the World—and Make Some Money Too
And lastly, TIME takes a look at the future of impact investing in the form of Millennials. Younger adults tend to flock to investments that promote social good. This has been a hot topic in the media recently, and is front and center with financial firms. Social investing has come of age, driven by a new generation that is redefining the notion of acceptable returns. These new investors still want to make money. But they’re also insisting on measurable social good. Millennials make up a big portion of this new breed, and their influence will only grow as they age and accumulate wealth.