Boy, were we wrong. First, we devoted a whole Returns on Investment podcast to the future of impact investing under President Hillary Rodham Clinton.
Then, we did a follow-up that still held out hope that President-elect Trump might soften his hardline position against urgent action on climate change. The latest podcast was recorded before Trump named climate-change denier and Oklahoma Attorney General Scott Pruitt to head the Environmental Protection Agency, and with other fossil-fuel promoters to high office. To be fair, the Returns on Investment podcast crew was not alone in either our initial denial or subsequent wishful thinking.
Now what? How should investors seeking positive social and environmental impact play the Trump era?
“It's now put up or shut up for impact investing. Let's put our money where our mouth is,” said David Bank, editor of ImpactAlpha.
Bank, who had just returned from COP22, this year's global climate conference (see, “Wishful Thinking: Clean Energy Revolution Trumps Climate Skepticism at Global Climate Talks”). In Marrakech, he said, the mood had gone from shock to grim determination. “The long term trends are what they are, both on the downside, in terms of climate risk, and on the upside, in terms of opportunities for renewables and other things. There was a notion that the rest of the world can lead, that private capital can lead, and let's carry on and not let this derail the progress that was made.”
Imogen Rose-Smith, senior writer for Institutional Investor magazine called that “false optimism.” But she said that Trump's positions on not only climate, but immigration, LGBT rights, and other issues could be a wakeup call for impact investors. .
“There's this recognition that ‘impact' shouldn't just be a Democrat or a liberal thing, that it shouldn't be dependent on a Hillary administration or a Labor administration in the U.K., that it's far broader than that and that it shouldn't be dependent on government at all,” Rose-Smith said. “That's what you're really seeing, a recognition that now we have to go out and do it on our own. It's time for the private sector to step up and act on these key issues.”
Indeed, there may be several issues where Trump's hard-to-pin-down ideology could be aligned with the impact camp. Some potential areas include charter schools, infrastructure investing, and jobs programs.
As the news of cabinet appointments trickle in, it will become more clear exactly what direction the Trump administration will head. It's up to the impact community to look for ways to further the goals of social inclusion and environmental sustainability wherever possible – with or without the support of the Trump administration.