Almost everyone agrees that impact investing is growing, but few seem to agree on how to bring it to more mainstream and traditional investors. The Inter-American Development Bank (IDB) and GIIN Forum on Impact Investing in Latin America and the Caribbean, held at the end of May, debated whether an investment needs an innovative angle to attract impact investors. Over 200 participants came to the event at the IDB Group’s offices in Washington to discuss how the LAC region can benefit from increased interest in impact investing, but few answers were forthcoming. Innovative models attract interest and attention, but they are often difficult to take through the test phase to prove readiness for market investments. What is the answer, wondered participants. More accelerators? More work on ecosystems?
Most agreed on the importance of development finance institutions like IDB which can bring together public sector policymakers with expertise in both the development and private sectors. However, more awareness of impact investment and the opportunities it offers will be needed. Organizations like GIIN are promoting these, along with greater transparency in the measurement of impact. One problem was image: mainstream investors, as one blogger on the event wrote, often ‘view Impact Investors touting the Impact card as tree-hugging granola eaters that aren’t real bankers’. The participant pointed out that, in their portfolio, the financially successful companies had greater social impact than the ones that put social goals centre stage.
For more information
http://blogs.iadb.org/sectorprivado/2012/05/30/how-to-mainstream-impact-investing
Comments (1)
Attention to investment ecosystems is helpful - accelerators are part of the ecosystem (have a look at my observation of the investment ecosystem. I would say accelerators play a key role in capacity building http://piqueventures.com/were-part-of-the-investment-ecosystem/). However, here is another way of looking at this. Approach this with a mindset that ALL investors are impact investors. So-called "mainstream" investors are interested in impact as well. Each person's idea of what is impact is personal and will differ. We have to get past the labels and the jargon and get to the heart of what outcomes we want to see in the world and start integrating them. To do this, we need a more integrated approach to investment decision-making - one that makes full use of our emotions, our intuition, our bodies, as well as analysis. Everyone does this. Everyone can do this. Integrated investment decision-making is how more people will take a so-called impact investing approach to putting their investment dollars to good use. If you'd like to hear more, do get in contact - via my website or you can always find me on Twitter @BonnieOWong.