Impact investing: tackling the doom and gloom!

Written by Alex Knight

Reading and watching the news at the moment can be a concerning endeavour. If it’s not the latest Russia-related diplomatic crisis, or Trump’s flamboyant tomfoolery (as I imagine his British doppelganger Boris might say), then it’s Facebook’s ongoing data scandal.

However, most people would also agree that the last few years have seen a spike in humanitarian and environmental concern:

Electric vehicles are on the rise, particularly in light of the Government’s recently announced 2030 goal, gender equality is being discussed and (to some extent) addressed, there’s also a growing anti-plastic movement and a tax on sugary drinks has even just come into effect in the UK.

In many cases, these are brought on by public awareness championed by a few key organisations and individuals; Tesla legitimising electric vehicles, Sir Attenborough for the plastic pollution problem and I guess Jamie Oliver for the UK’s sugar tax…

Get the mob on board

Anyway, if anything, these examples are evidence of one thing: if something draws the public concern enough, it’ll catch on. (Particularly when it makes long term economic sense like electric vehicles or recycling).

Impact investing is the practice of investing capital to generate a positive social or environmental benefit alongside a financial return. Impact investing can capitalise (do excuse the pun) on these growing popular trends – it’s a potential solution for many of these issues.

The term is catching on now faster than ever before, but it’s critical that momentum is maintained.

Bringing the practice more directly to the attention of the masses will inevitably increase support and engagement for the industry, both on an institutional and retail level.

So what can we do?

Most are simply unaware that a good deed can also generate a financial return. You don’t have to just give it away to a faceless bank – you can invest in causes you want to support.

We need to reinforce that key message and get it out there in front of all potential investors.

As outlined by a recent UK Government report, PR and the media will need to play a role in the up-take. We’ve definitely seen a growing level of media interest recently – something I have noticed working in the space over the last year – but the practice should be brought to a mass market.

We’re also on the brink of a major change in wealth allocation: wealth is trickling from baby-boomers to millennials who might soon have more capability to invest.

Knowing millennial trends, impact investing could be a popular way to go…

The aim is simple

Like with Tesla, Sir David and Jamie Oliver – impact investing needs pioneers to bring it to the front of dialogue!

There are existing organisations such as the Global Impact Investing Network (an Aspectus client) and Omidyar Network who are taking on that role, but there’s still scope for someone to come and capture the public imagination.

Now is the time to align private capital with that growing public consensus – it shouldn’t be the sole responsibility of government and charities to improve lives, businesses have a role to play and impact investing is the glue which can stick it all together.

With impact investing, we’ll get to read more of that positive news we all like reading.