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 April:
Impact Investing Bridges The Political Divide
Bain Capital has brought on former Massachusetts governor Deval Patrick to lead new social impact investing arm of the firm. The former governor will start a new line of business, directing investments in companies that produce profits but also have a positive impact on social problems. For Bain Capital, the Patrick hiring goes beyond the practice of giving a politician a desk between elections. It is a way for a firm to provide clients such as pension funds and wealthy individuals with a social outlet for their money. Read more.
Sustainability Meets Wall Street
Putting a company’s social and environmental returns on the same level as financial returns is a big deal. The online craft bazaar Etsy made its debut on the Nasdaq stock market, signaling the birth of an unusual public corporation. Etsy is one of a growing number of companies, called B Corps, that pledge to adhere to social and environmental accountability guidelines set B Lab. Read more.
Understanding the Performance of Sustainable Investment Strategies
A new Morgan Stanley study finds that sustainable investments outperform their traditional benchmarks. They found that sustainable equity mutual funds had equal or higher median returns and equal or lower volatility than traditional funds for 64% of the periods examined. They also report a positive relationship between corporate investment in sustainability and stock price and operational performance, based on a review of existing studies. Read more.
Measuring What Matters
In February, the Case Foundation, B Lab, and a number of leading social entrepreneurs and impact investors participated in an event to talk about the need for business to join government, nonprofits, and philanthropy in solving social problems. This has led to Case Foundation and B Lab collaborating to start new initiative: “Measure what matters”. The goal is to provide easy-to-use online tools (including the B Impact Assessment and B Analytics) that any company can use to assess, compare and improve their impact. Read more.
New Nordic SIB Network Announced
On March 30th the first meeting of the Nordic Social Impact Bond (SIB) Development Network took place at The Impact Hub in Stockholm. Representatives from Sweden, Norway, Finland and Denmark convened to share experiences and insights from specific SIB initiatives in each market. The Network participants shared some similar challenges encountered in their collaboration with municipalities in SIB development. Read more.
Key Convenings
Earlier this month, the 2015 Skoll World Forum on Social Entrepreneurship took place in Oxford, England, and featured discussions on impact investing. This year, as in the past few years, there were pre-Skoll events exclusively devoted to impact investing, (like this one hosted by CASE i3, ICAP Partners and the Skoll Centre). Read more.
Also this month, The Sankalp Forum hosted its 2015 Global Sankalp Summit on April 9-10th in New Delhi. This year the summit brought a stronger focus on the role of government, the private sector, and capital in fueling the innovation economy. Attendees included leading stalwarts of Indian politics and administration, industry captains from across the private sector, social entrepreneurs and the global impact investing community, including corporate investors and DFIs. Read more.