Roadmap Presents ‘Unashamedly Ambitious’ Vision For Impact Investing

A new roadmap has been laid out to accelerate development of the impact investing market and build a future in which finance is instrumental to social and environmental progress.

The Roadmap for the Future of Impact Investing: Reshaping Financial Markets, which was launched by the Global Impact Investing Network (GIIN) on Tuesday, presents “an unashamedly ambitious” vision for more inclusive and sustainable financial markets.

The framework, which was started to coincide with the 10 year anniversary of the coining of the term impact investing, assesses industry progress to date and outlines specific actions needed to exponentially enhance the scale and effectiveness of impact investing across the world.

GIIN CEO and co-founder Amit Bouri said the roadmap presented a collective plan to accelerate the development of the industry.

“Impact investing is laying the groundwork for a new model for financial markets – one in which the markets work for people and the planet, as well as investors,” Bouri said.

“In order to meet the urgent need presented by social and environmental challenges around the world, the global impact investing market needs to scale and develop at a much faster pace.

“We believe this roadmap can multiply the impact of this movement and shift expectations about the role capital plays in society.”

The roadmap, developed with inputs from more than 350 individuals operating in the impact investing ecosystem around the world, defines the immediate actions required to propel a long-term shift.

In particular it identifies 18 actions across six categories of action to drive progress toward the vision, including specific actions needed, which stakeholders should lead on these actions, and a timeframe.

The six categories of action include:

• strengthening the identity of impact investing by establishing clear principles and standards for practice;
• changing the paradigm that governs investment behavior and expectations about the responsibility of finance in society via asset owner leadership and updated finance theory;
• designing tools and services that support the incorporation of impact into the routine analysis, allocation, and deal-making activities of investors;
• developing products suited to the needs and preferences of the full spectrum of investors, from retail to institutional and of various types of investees;
• increasing supply of trained investment professionals and pipeline of investment-ready enterprises through targeted professional education; and
• introducing policies and regulation that both remove barriers and incentivise impact investments.

In the conclusion the report said it will be “unacceptable” to make investment decisions without regard for impact on people and the planet in the future.

“We do not presume that all investing will necessarily be impact investing, but we do aspire to a world where the integration of impact considerations into investing decisions will simply become the normal way of doing things,” the report said.

“This vision entails fundamentally reshaping both investor mindsets and the functioning of financial markets.

“It is ambitious, even idealistic, but this is the future toward which we must strive; anything less will be unsustainable for human society and the planet.”

Daniel Madhavan, CEO of Australian impact fund manager, Impact Investment Group (IIG), told Pro Bono News Australia’s mainstream financial and business sectors could be inspired by two parts of the roadmap in particular.

“The fundamental vision, that ‘social and environmental factors are integrated into investment decisions simply by default’, and that how we invest our money can be a big factor in reaching the sustainable development goals, and the Paris Climate Agreement,” Madhavan said.

The roadmap was produced in consultation with The Monitor Institute by Deloitte and with support from The Rockefeller Foundation.

The Rockefeller Foundation managing director Saadia Madsbjerg said they had been been committed to developing the impact investing market since the industry’s earliest days and were looking forward to continuing to advance the market through the roadmap.

“We believe impact investing holds incredible potential to help address many of the world’s most pressing social and environmental challenges,” Madsbjerg said.

“The industry also plays a pioneering role in influencing how all of us think about the value of our capital.”