Almost all conversations today cannot end without the mention of Covid-19. The virus that literally took the world to its knees. Nobody wants to sound despondent but it is very likely that there is never going to be a miracle cure or a silver bullet for this deadly virus. It is the new normal that is bringing further normals to how things are done. As the world struggles to rise again from the immense impact of the virus, t companies and businesses must look into new directions to re-strategize and re-focus on achieving sustainable investing. The investment pointer now shifts to several directions on the way to go. One way that will not go without notice, however, is impact investment.
Impact investment seems to be the ultimate solution for institutions when it comes to zeroing in on how to achieve sustainable investing. It focuses on investments made into organizations and companies with the intention to generate measurable social and environmental impact alongside a financial return. Companies that seek to combat climate change, environmental destruction and any other negative impacts to society and the planet should put impact investing at the core of their strategies. Impact investing is not only about making money but making money do more.
To drive impact investing, first there has to be impact investors. What would an impact investor consider in a business before getting on board? Here are some key factors:
- Profitable businesses that support corporate social responsibility
- Businesses that focus on renewable energy and sustainable agriculture
- A strong business model that will lead to a strong financial return
- A financially literate team with vast experience in the field
Institutions must, therefore, make themselves attractive to impact investors, a major boost on the great journey towards a sustainable world.
In 2009, the Global Impact Investing Network (GIIN), a non-profit membership organization was established with the sole aim of convening impact investors to facilitate knowledge, exchange of innovative investment approaches and produce valuable resources to enhance great financial returns alongside sustainable solutions. GIIN, which has over 330 members across 50 countries including KCV has greatly reduced barriers to impact investing by building a strong foundation and developing activities such as education and research that help to fasten the development of a consistent impact investment industry.
GIIN CEO and Co-founder, Amit Bouri, says “Sustainable investment and impact investing, in particular – is key to tackling the climate crisis and is growing in popularity.” Bouri underscores that sustainable and impact investing is not just for the well abled or the millennials. To him, what matters is converting that interest into actual investment and actual impact.
Therefore, it is high time businesses created a conducive environment that attracts impact investors. In particular, becoming members of organizations like GIIN and delivering innovative climate change solutions are moves that could bring a major impact towards a sustainable future. In this season of re-adjusting, re-focusing and re-planning for many businesses let all those re-s come in handy with a doorway for impact investors to allocate capital to fund solutions to the world’s most intractable challenges.