Leaders from Cornerstone Capital, Gitterman Wealth Management, Imprint Capital (Goldman Sachs), CTC/MyCFO, Rockefeller Foundation, Wetherby Asset Management, UBS, Veris Wealth Partners and other organizations joined ImpactAssets in early 2017 for roundtable discussions in New York City and San Francisco.
Ron Cordes, co-founder of the Cordes Foundation and co-founder of ImpactAssets, facilitated the dialogue among more than 55 impact investment leaders. David Bank, the CEO and editor of ImpactAlpha shared his view as the impact industry’s “chronicler”.
Among the questions the impact investing leaders addressed were, “What are clients interested in post-election?” and “How can impact investing continue to gain momentum?”
Five key themes emerged:
Impact investing growth will continue despite the uncertain environment.
- It’s hard to overstate the volume of interest in impact investing.
- Consumer appetite for longer-term thinking and sustainability is happening and will continue.
- Forces of economic progressive outweigh any regulatory or regime change. The renewable energy sector isn’t going to slow down. The fundamental trends are what they are.
- Large institutional investors and retail asset management organizations are “mainstreaming impact.”.Retail products are coming to market empowering people to “vote with their dollars.”
The post-election environment is generating investor activism.
- Clients are stepping back and assessing how their philanthropy and portfolio align with their values.
- More investors are asking “how can my investments align with my interest in positive environmental and social impact”?
- There is an increased level of engagement and interest in donor advised funds and foundations for investing and granting.
Increased interest in community investing.
- The current environment is driving investors to “think globally, act locally”.
- Investment climates at the state and regional levels have become more conducive for opportunities and investors are “digging in.”
- Investors want to see that their impact is making a real difference for working people. Sustainable job creation is very important.
Enhanced focus on impact returns.
- Investors want decent competitive financial returns but they are starting to place more emphasis on impact returns.
- There are many different paths to impact so the emphasis on performance continues to depend on individual need.
- There is a mobilization of forces towards impact investing as young investors are becoming successful. We want to make sure the “falsehood” of measuring impact doesn’t get in the way of intentionality. It’s important not to be perfect.
The “returns trade-off” perception still exists.
- Investors are figuring out how to make impact investing part of their identity. The biggest question is often “what am I giving up to do this?”
- Old paradigms die hard. Investors think they have to make some trade-off.
- Education and positioning is key to overcoming the perception of trade-off.
The discussion ended with some big picture thoughts, questions and eternal verities.
- What does success look like for impact investing at this point? More capital? More people?
- With impact measurement, it’s important not to “seek perfect” but to keep moving forward.
- The definition of impact investing needs to be rethought as it scales.
- We need to move the public markets forward in order to scale impact investing. It’s about intentionality and measurement.
- Is there really a global impact investing agenda that can work for everyone?
- Pension funds are mapping investments by goals. There are a smattering of retail impact products and a recognition that retail needs to do something similar.
- When do the big trends and solutions become additive and generate “impact alpha”?