W11 Impact Investing

 

Impact investing = long-term sustainable solutions + goal of better society. Impact investing is a way to turn a profit and invest resources in areas that would have the most measurable benefit to a social or environmental cause. Mayor states in the article Impact Investing is Hot Right Now. Here's Why (2019, Sept.) three attributes in companies that it’s considering adding to its Global Impact portfolio: 
  1. Materiality (meaning a prospective firm’s core products or services — rather than its operations — must solve a problem that falls under one of three global impact themes: life essentials; human empowerment; and environment). 
  2. Additionality (meaning the company provides a product or service that a competitor or government entity isn’t providing, thereby advancing rather than simply maintaining social or environmental goals). 
  3. Measurability (which provides a way for investors to ensure the company continues to meet or exceed the investors’ impact goals).
It is a question of scalability. Discovering if the business does have the potential to grow in the sense of broadening and deepening its influence, as well as in its ability to deliver returns. When investing to make an impact long-term is how you should think of the world. 

Professor Elena Loutskina at the University of Virginia, Darden. (YouTube, Three Things: What Is Impact Investing? 2017 Sept.), clarifies what impact investing is not:  
  • NOT philanthropy OR charity --rather it emerged from these failing efforts to address social problems-- despite philanthropy growth rate, it didn't make world better-safer-heathier-less polluted. Impact Investing allows $$ to flow to local entrepreneurs who can solve problems in a sustainable-for-profit way + are best positioned to understand local problems such as inadequacy of education-healthcare-food supply-clean water. 
  • NOT every socially inclined investment is Impact Investing. For example a "BoGo" type-sale on shoes where for every pair you buy a pair is provided to someone in need. You're being charitable but not providing a lasting change. Impact Investing targets co. that create additional impact at the core of their business. 
Loutskina also is clear about that to expect: 
  • EXPECT finical return; generating return (attract $). 
    • Required financial return sets high bar for businesses seeking funding. 
    • Investing in & Jumpstarting a profitable business 
    • solving social problems year after year after year. 
Muhammad Yunus would like poverty to only exist in museums --is that possible? Yes, of course! We have an scriptural account of it happening even. The City of Enoch spoken of in the Pearl of Great Price. By choosing the Lord first, choosing to love others became easier and natural. The citizens of the city of Enoch chose Jesus and a way of life and to focus on whom and what they sought first. “And the Lord called his people Zion, because they were of one heart and one mind, and dwelt in righteousness; and there was no poor among them" (Moses 7:18). Enoch, spoken of in the Old Testament is able to create social change in his city through his obedience to God. 

Is it likely poverty will only exist in museums? (sadly) No. Inequality is deeply rooted in mankind's greed and impulse to look-out for self. The rich who donate are disconnected from the real problems and often frequently change their opinion on worthy causes-- moving onto the latest social trend to maintain appearances. 

I would like poverty to only exist in museums. Impact investing does align well with my desires for a better world. Impact investing balances both financial return and specific goals that relate to improving the environment and/or society.


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