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Becoming an impact investor

February 18, 2013

How do you become an impact investor?

The short answer is to choose investments that solve social or environmental problems. For most of us, however, that is easy to say and not so easy to do. As a retail investor, there are few places where one can invest to gain a financial return while supporting social or environmental solutions.

Two local opportunities that are available are the Centre for Social Innovation’s Community Bonds and SolarShare’s Community Solar Bonds. These initiatives rely on community members becoming investors who, in turn, benefit from helping to build local initiatives and solutions while gaining competitive rates of return. However, unless you are connected and “in the know,” these opportunities may pass you by.

Our work at the MaRS Centre for Impact Investing is to help build an accessible and integrated impact finance system across Canada so that, in our future, investors will know about opportunities, have financial products available to them and understand how their investments are creating solutions that matter.

CSI and SolarShare are just two local examples of a much larger cultural shift taking place in Canada and globally. That shift is the acceptance that one single sector or industry can no longer champion solutions. Instead, solutions will come from a hybrid space that makes use of the talent and structures offered by the capital markets, the social economy and local economic development enabled by progressive public policy. In time, this type of collaboration will fundamentally change how we use our current systems to solve critical problems and improve economic inclusion.

There is momentum both in Canada and globally. The evidence can be seen in Canada in the announcement of the Council for Clean Capitalism, in the growth of B Corps and social enterprises, and in movement-building forums such as the Social Finance Forum. In fact, the Social Investment Organization recently reported that impact investing assets have grown to a total of $5.3 billion or a 20% increase since the last review in 2010.

Globally, we see the strengthening of collaborations in the Global Impact Investing Network, a significant growth in business schools offering impact investing programs and movements captured at the Skoll World Forum, SOCAP and the Social Enterprise World Forum. Current estimated growth for impact investing globally is $500 billion.

Impact investing offers an opportunity to improve access to capital to address the wicked challenges we face. Sylvia Earle, the renowned oceanographer who spoke this year at SOCAP, inspired me. She illuminated that we are at a unique time in our human existence on this planet. We have enough information to know that imminent environmental change is taking place. We have the infrastructure to connect with anyone globally in an instant and the technologies and innovations that can change the course of our planet.

Sylvia challenged us to think back 50 years to recognize the critical choices that were or were not made that affect us today. Fifty years from now, what will people be reflecting back on about our time and what can we set in motion that will make an impact for the future?

There are many examples of impact investing across Canada and internationally. If you are interested in learning more I suggest you stay in touch with us at the MaRS Centre for Impact Investing and follow sector developments through SocialFinance.ca.

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Joanna Reynolds

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Joanna is Associate Director, MaRS Centre for Impact Investing and has worked with MaRS and Social Innovation Generation National since 2008 on the advancement of social finance in Canada.

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