Towards the end of a thought-provoking, inspiring and oversubscribed (over 800 impact leaders) Impact Days, EVPA’s CEO urged us to keep our ‘eyes on the prize’. And indeed, this is why we travelled to Brussels last week – to tell our stories, share our lessons, and make valuable connections with each other as we work to invest our capital for good.
But what does ‘good’ mean in our broader economic context? At a time when we are experiencing a series of interlinked and cascading crises – from climate to health, food to security, energy to refugee – ‘good’ is not always easy to attain. To answer that, we need to look at the larger system, which is what co-President of the Club of Rome, Sandrine Dixson-Declève, urged us to do when she highlighted the deeper issues that perpetuate our broken, global economic system. Specifically, she emphasized three negative Ps – power imbalances, a relentless focus on profit, and a culture steeped in patriarchy – and asked us to embrace three positive ones instead, people, planet and prosperity.
In fact, when we consider what ‘good’ looks like, we need to think bigger. Our ‘prize’ as Roberta called it is not just getting to net zero. Zero is not enough. We need zero poverty. Zero discrimination. Zero inequality.
And that’s where finance can play a role. Together, we can influence how money moves through the real economy. As Sandrine said, we need to stop funding the ‘bads’ and start funding the ‘goods’. Why, for example, do we continue to provide over $700 billion in subsidies to the fossil fuel industry?
And so, to the 800+ capital providers who gathered in Brussels this past week, we have an important call to action. We need to use the power of our capital to work toward an inclusive and climate-positive economy. We, as impact investors, foundations, and blended finance providers, already do this by seeding new ideas, accelerating innovations, and derisking new concepts for more commercial investors to come in.
At the same time, we can do more. We can use our power to tackle the larger systemic barriers to impact, and this, Sandrine reiterated, means that we ultimately need to change the rules of the system. In my subsequent conversation with Deputy Director-General Nils Behrndt of the European Commission’s DG JUST, it’s clear that policy must play a critical role – both in terms of carrots (to reward the leaders) and sticks (to lift up the laggards). And with the EU’s flagship proposal on Corporate Sustainability Due Diligence Directive currently in play, we are seeing much progress here. But even these new ‘rules’ are fundamentally at risk. This is where we – as capital providers – can use our voice and our might to support these important policy moves. Our impact ambition depends on it.
Leslie Johnston is the CEO of the Laudes Foundation and the Chair of EVPA.