Impact Investing, Impact Management and Impact Consuming
Impact Investing, Impact Management
and Impact Consuming
At a recent conference we attended, Amy Clarke (the co-founder of Tribe Impact) acknowledged that “every investment is an impact investment” - a statement we struggle to disagree with as every investment should be seen as an attempt to change the world is some way or another.
However, a question that for so long has been ignored, is what impact investment is having on non-financial factors such as the environment, gender inequality, access to basic services, etc. Whilst, therefore, there is clearly a wider debate around the definition of impact investment, we believe that impact investing’s true meaning is that investment has a goal of achieving a positive result on a social or environmental issue.
Companies and investors need to start asking what is the totality of all the impacts of an investment? Since it should be positive in its impact on social and environmental issues on the whole, we must also start asking what the base-line for comparison is; what are the targets and how do we measure progress? Ways of measuring the impact of investment are starting to come into focus. Various initiatives to define and measure impacts are beginning to be applied more often, such as The Impact Management project - an emerging global impact measurement tool by Bridges Ventures. There’s also The Sustainable Development Goals (SDGs) for example, which present a set of global targets covering all economic, environmental and social aspects.
• The Impact Management Project
• Sustainable Development Goals (SDGs)
Of course, investors are not the only decision makers who have impact. Managers of businesses make decisions every day that have multi-dimensional impacts. A systems based approach to investment appraisal would cover the non-financial impacts, both good and bad. So to what extent and how do organisations that have environmental goals factor this into every decision? Investment appraisal and the way it is taught and practiced is entirely focused on the financial aspect, despite the fact that other non-financial factors can be more strategic (and therefore, more important).
Consumers are also part of the impact process. Daily purchase decisions often have an impact on distant part of the world as a result of long supply chains that can be negative in various aspects when viewed against the lens of SDGs. Systems that bring greater transparency of the impacts to consumers - such as FairTrade - have emerged, but there’s still al to more to be done to ensure consumers factor in the effects of decisions.
Whilst there’s a lot to continue to think about and many questions to ask, impact investing is certainly growing in volume and it’s a really positive trend that all of us at Cameron Barney fully support. We only work with clients who are responsible and ethical, and have a strong vision for leading positive changes through sustainable infratech. When supporting the growth of these clients, we consider the impact that investment will have on all stages, from the actions of management to consumer stages. And when capital is gained to stimulate growth, we can rest assured that its impact is doing good for the planet by developing non-financial strategies, and isn’t just lining an individual’s pocket.