Impact Investing is the “act of investing money with the deliberate intention of achieving a positive financial return and social value,” as described by Professor Cathy Clark of Duke Fuqua School of Business.
In many ways, it “stems from the failures of traditional philanthropy and aid” (James Tansey, UBC Professor & CEO of OffSetters Climate Solutions ) to address many of social, economic and environmental problems that continue to face humanity today.
What Impact Investing Is and Is Not
Impact investing is distinguished from crowdfunding sites, such as Kickstarter, because impact investments are typically debt or equity investments over US$1,000 with longer ROI times (compared to VC) and a non-existent “exit strategy” (compared to IPO’s).
Impact Investing also encompasses the world of corporate venture investing or CVC. “We are at the start of seeing something that has the power to change the world,” says Daryl Brewster, CEO, CECP.
“Impact investing is the cutting-edge tool for companies looking to achieve financial, environmental, and societal goals – all at the same time. We expect more leaders in corporations to leverage their companies’ resources and competitive advantages through impact investing. Ultimately, this will make a positive impact in the marketplace and in people’s lives.”
Rapid Growth
The field is growing rapidly. Surveys in 2011 by the Global Impact Investment Network or GIIN, and by the Monitor Group, counted around 60 new funds, and estimated growth then from US$50 billion to US$500 billion.
In a recent 2016 study by JPMorgan Chase and GIIN, the entire impact investing field is now projected to grow to US$2 Trillion by 2025 from the current US$60 billion.
The video above is of McGill’s Karl Moore talk with UBC’s James Tansey about how the world of investing is changing.
