July 19, 2013
I had the pleasure of attending Partnering for Global Impact 2013 in Lugano, Switzerland, on July 10 and 11. The conference’s aim was to bring together renowned global leaders in impact investing with social enterprises that are bringing about changes in healthcare, education, agriculture, clean technology and housing.
Speakers included Sir Ronald Cohen, head of Big Society Capital, who I had the opportunity to interview; Jed Emerson, author of Blended Value; and John Morton, chief of staff at the Overseas Private Investment Corporation. Speakers varied in sector experience, as well as geographic target, which allowed participants to gauge where impact investing is going next and what we can do to build the market.
“We’re on the brink of a revolution”
During the conference, I had the pleasure of interviewing Sir Ronald Cohen and getting his take on the future of impact investing. He believes that we can do with social and environmental investing what we did with technology investing. He believes that as venture capital continues to acquire impact investing assets, so too will mainstream financial institutions, followed by retail investors. “We’re on the brink of a revolution,” Cohen said.
These assets will play many roles in companies new and old. Social technologies will begin to form models of new companies that have locked-in social missions, while well-established traditional for-profit companies will begin to adapt social enterprise models so that they can play a role in this new paradigm. The result will be continued and growing impact that cuts across sectors, across industries and throughout supply chains.
We have to be critical and thoughtful
Filipe Santos, academic director of the INSEAD Social Entrepreneurship Initiative, warned conference participants to avoid the hype of impact investing. He stressed the importance of finding the gaps, clarifying opportunities, building infrastructure, and validating models and niches. Impact investing is not just about what’s trending.
To further stress overcoming the hype, Ken Crossley of the United Nations World Food Programme posed five questions that social entrepreneurs and impact investors should consider when thinking about their solutions or impact investment:
Impact entrepreneurs and investors who critically evaluate a problem, a vision and a solution will be critical to the growth of impact investing. Being thoughtful and deliberate about what the impact will be and how that impact will be achieved will help investors and entrepreneurs avoid the pitfalls of following a trend or falling for the hype.
We can’t overlook the supply chain
Innovation doesn’t just lie in an end product or consumer service. Brendon Brewster of Veerhouse Voda described how his firm builds affordable housing with a particular focus on working with suppliers to develop the most sustainable materials and inputs. This approach amplifies impact while increasing the quality of the company’s housing stock.
Impact investing will play a larger role in supply chains. For instance, as clean technology grows and achieves scale, it will need a supply chain that is also clean, sustainable and at scale. Whether it is mineral processors or plastics producers, innovation in sustainability in these lines of business is critical.
It’s even more important for investors to understand that they can have an impact throughout the supply chain, rather than just at the end or the beginning. These middle suppliers will need the same impact capital and business supports to help them bring their innovations to market and scale.
Partnering for Global Impact 2013 was a remarkable experience for investors and entrepreneurs trying to understand and cement their roles in the ecosystem of social and environmental change. I look forward to next year!