Impact Investment figures range from 60 billion in assets under management with 10+ billion invested in 2014 (Eyes on the Horizon:The Impact Investor Survey May 2015, JP Morgan and GIIN). There are many detailed graphs about impact and percentages of assets committed, if you need proof to believe that Impact is a good strategy.
There are many of these reports and analysis with wide ranges of what it is and what researchers have found in asset allocations. Yet, we are constantly reminded that the investment opportunities are small, not scalable, not market rate, not quality, high risk and fundamentally they are “charity”.
There is a much more compelling story. Let’s focus on money flows. Look at the sectors below that make investments that match the definition of Impact, as stated above.
- Public Transport Infrastructure
- Fuel Free Energy Systems (Renewable Energy)
- Secondary Market of DFI’s (Development Finance Institutions)
- Green Real Estate including Retrofits
- Agroforestry including Redd++ (avoided deforestation)
- Social Impact
If one accepts these definitions then the amount of money going into Impact Investing, is actually in the Trillions and has been for quite a while. WRI(World Resources Institute) recently wrote a report called the Trillion Dollar Question. “The transport sector is growing quickly, with the global vehicle fleet on course to double by 2050. According to the paper, global transport investment is between $1.2 and $2.4 trillion annually.”
If one accepts the common Impact definition, then the present Impact discussions and case studies are vastly missing the point. We are focussed on the one small plant, that is pretty, in a massive forest of opportunity.
When I hear the discussions around Impact by those trying to convince others, I am reminded of the scene from the movie Serpico, where Frank Serpico, a New York Police Detective is confronted with the scale of corruption in the narcotics division. One of the crooked cop describes the graft sums as “serious money”. Impact Investing is talking about “serious money” and always has been.
One only needs to have an an open mind, look around and do the math. Do you want a financial return with a social and environmental added value? If so, why are you waiting for more research, when the opportunities are overwhelming?
http://blog.tbli.org/wp-content/uploads/2015/09/Serpico.m4v
There are people who have money and people who are rich.
Coco Chanel