‘Brexit’ Lays Down Challenge for Impact Investors: Can Inclusive Capitalism Work for All?

A tide of nativism has risen to resist the forces of globalization. In America, it's encapsulated in the ascendence of Donald J. Trump. In Britain, it manifested itself in the vote for ‘Brexit,' presaging the UK's exit from the European Union.

ROI IMageThis week on the Returns on Investment podcast, our resident experts explore what this retrenchment means for social-impact investing.

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“You could say that impact has failed,” says Imogen Rose-Smith, senior writer for Institutional Investor – and a royal subject. “If impact hasn't succeeded in helping Britain get to the point where it wanted to stay in the EU, then a lot of what it is hoping to achieve is not being achieved.”

The perceived loss of opportunity for the lower-middle class seems like a ripe opportunity for impact, she says. Yet, impact is pro-global, so can be seen as insensitive to domestic concerns.

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David Bank, editor of Impact Alpha, said a recent gathering in Lisbon of global leaders of impact investing took on fresh urgency post-Brexit.

“It's a make or break moment for impact investing,” David said. “Is it able to really articulate a different alternative from either this nativist, isolationist, alternative that both Trump represents and Brexit represent, or this naked globalization that is the only other thing on offer?”

“If impact investing is worth it's salt it should be able to say there's an inclusive, sustainable, prosperous future that works for domestic constituencies.”

Brian Walsh, who heads impact for Liquidnet, the New York financial technology company, said impact investing must address the new populism. The impact investing community cannot imagine itself as separate from what is happening in the political realm, he says.

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