Momentum Grows but Challenges Remain for Mainstreaming of Impact Investment

LONDON--()--A lack of knowledge and distribution in the industry (28%), the risk of green-washing (25%) and measurement challenges (23%) are the key risks facing the impact investing industry, according to a poll of impact investment experts conducted at The Economist Events’ Impact Investing conference.

“Momentum is gathering for impact investment, with the generational transfer of wealth to millennials, the growing financial inclusion of women and rising investor interest in solving social problems likely to affect the course of capital flows in the future”

The conference, which took place on Thursday June 15, 2017 at Glaziers Hall in London, was chaired by editors from The Economist and featured over 30 speakers at the forefront of the impact investment movement. Its purpose was to analyse and debate the main obstacles and opportunities to moving impact investing into the financial services mainstream.

“Momentum is gathering for impact investment, with the generational transfer of wealth to millennials, the growing financial inclusion of women and rising investor interest in solving social problems likely to affect the course of capital flows in the future,” said Matthew Bishop, senior editor, The Economist Group. “There are still plenty of unanswered questions though, not least around accessibility, education, transparency and measurement. What is clear from this conference is that impact investing is an incredibly active area with parties from across finance, investment, corporations, social movements and government dedicating significant resources to answering those questions.”

Key themes that emerged from the conference include:

  • As Sir Ronald Cohen, Chair, The Global Steering Group for Impact Investment, said: “Everyone is now talking about creating impact. Even the cover of W, the fashion magazine, boasted the headline ‘Good is the new cool’. We must all strive to get to a tipping point by 2020.”
  • Whether enough capital is being dedicated to impact investing. As Nigel Kershaw, chair, Big Issue Invest, said: “More democratisation is needed to bring the mainstream to impact investing through the provision of products targeted at smaller investors. It’s time we brought the mainstream to us.”
  • Measurement is a key battleground in the mainstreaming of impact investment. As Abigail Noble, chief executive officer, The ImPact, said: “We are letting perfect be the enemy of good when it comes to impact measurement. Instead, we need to focus on intentionality, transparency, and accountability.”
  • There is a need for a comprehensive impact management framework to explain the outcomes of impact investment in all its guises.
  • Greater education of intermediaries, advisors and consultants is required for impact investment to gain traction.

A highlight of the conference was an Oxford-style debate between Lisa Ashford, chief executive officer of Ethex and Mark Campanale, founder of Carbon Tracker, and Lutfey Siddiqi, visiting professor-in-practice, The London School of Economics and Matthew Spencer, director of campaigns, policy, and influencing at Oxfam. The motion debated was that investors and bankers, not politicians or social movements, are the best hope for avoiding climate disaster. While the audience ultimately voted against the motion, the resounding conclusion was that all parties have their role to play and that collaboration is key in tackling climate change; as one of the panellists said, “It’s a team sport”. A replay of the debate can be viewed at https://www.youtube.com/watch?v=IILxJH0cJ3A.

Speakers at the event included:

  • H.S.H Prince Max von und zu Liechenstein, Chief executive officer, LGT Ventures
  • Mara Airoldi, Director, GOLab
  • Lisa Ashford, Chief executive officer, Ethex
  • Clara Barby, Lead partner, Impact Management Project
  • Mark Campanale, Founder, Carbon Tracker
  • Maya Chorengel, Partner, The Rise Fund
  • Ronald Cohen, Chair, The Global Steering Group for Impact Investment
  • Patsy Doerr, Global head of corporate responsibility, sustainability and inclusion, Thomson Reuters
  • Toby Eccles, Founder, Social Finance
  • Emmanuel Faber, Chief executive officer, Danone
  • Katherine Garrett-Cox, Member of the supervisory board, Deutsche Bank
  • Michele Giddens, Partner and co-founder, Bridges Fund Management
  • Mark Goldring, Chief executive officer, Oxfam
  • Catherine Howarth, Chief executive officer, ShareAction
  • Leon Kamhi, Head of responsibility, Hermes Investment Management
  • Nigel Kershaw, Chair, Big Issue Group
  • Charly Kleissner, Co-founder, Toniic
  • Charmian Love, Co-founder, B-Lab UK
  • Mark Malloch-Brown, Co-chair, Business and Sustainable Development Commission
  • Justin Mundy, Director, International Sustainability Unit
  • Abigail Noble, Chief executive officer, The ImPact
  • Nick O’Donohue, Chief executive officer, CDC Group
  • Rodney Schwartz, Founder and chief executive officer, ClearlySo
  • David Scott, Chief executive officer, Tribe Impact Capital
  • Omar Selim, Chief executive officer, Arabesque Asset Management
  • Sapna Shah, Director of strategy, GIIN
  • Lutfey Siddiqi, Visiting professor-in-practice, The London School of Economics
  • Matthew Spencer, Director of campaigns, policy, and influencing, Oxfam
  • Laurie Spengler, Chief executive officer, Enclude
  • Gavin Wilson, Chief executive officer, IFC Asset Management
  • Mark Zinkula, Chief executive officer, Legal & General Investment Management

For more content and exclusive Q&As with some of the speakers, please visit The Economist Events’ Impact Investing blog page http://www.economistimpactinvesting.com/

IFC Asset Management Company were Gold Sponsors and Barclays were Silver Sponsors. BackBay Communications provided PR support for the event.

Supporting associations included CAIA Association, ClearlySo, The Fintech Times, Hedge Connection, Principles for Responsible Investment, Global Impact Investing Network and the UK Sustainable Investment and Finance Association.

About The Economist (www.economist.com)
With a growing global circulation and a reputation for insightful analysis and perspective on every aspect of world events, The Economist is one of the most widely recognised and well-read current affairs publications. The paper covers politics, business, science and technology, and books and arts, concluding each week with the obituary.

The Economist Events brings the publication to life. As the leader of debate in the pursuit of progress, Economist Events tackles leading issues with an insightful, forward-looking and distinctly global perspective. It provides the necessary tools for business leaders, senior executives and policy makers to make informed decisions and to stay ahead of the game in a rapidly changing world.

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Release Summary

Lack of knowledge (28%), risk of green-washing (25%) and measurement challenges (23%) are key risks facing the impact investing industry.