Although investments for social and environmental impact have been made for decades, the field of impact investing has really taken off over the last decade, and since 2007 in particular. This evolution has been covered in a new report titled “Accelerating Impact: Achievements, Challenges and What’s Next in Building the Impact Investing Industry,” which was written by E.T. Jackson and Associates Ltd. on behalf of the Rockefeller Foundation. This report places impact investing in context and examines recent progress in building the global industry, followed by recommendations to accelerate the rate of growth.
As the authors state: “The past four years have seen accelerated growth in, among other things, the number of organizations in the field, the quantum of capital mobilized, the variety of financial products offered, the number of participants in key networks, the number and depth of research outputs by the industry, and the range of methods and tools for measuring impact. There is both a need and an opportunity for industry leaders to join together to catalyze a powerful further acceleration—a surge in the rate of growth—across a wider range of dimensions, in order for the field to reach maturity, scale and sustainability.”
The report is worth reading for anyone who wonders how we can bring together the resources required to address deep social and environmental challenges. At a high level, it really shows how much work there is still left to be done and illustrates that there is little room for complacency (while acknowledging that progress is critical).
This candour is refreshing since the field of impact investing has often been criticized for featuring excessively optimistic conversations. However, as the experiences of the microfinance industry have shown, unrealistic expectations can cast doubts on and even derail genuine progress.
To be certain, impact investing has made important strides in the last few years. The “Accelerating Impact” report examines many of these and identifies a number of challenges as well. The following challenges are worth special consideration.
In dynamic environments, however, the assumptions underlying certain business models may crumble at any time. No one wants to repeat the experience of Andhra Pradesh in 2010, when the microcredit market collapsed after the state government changed regulations.
Leadership doesn’t always come from the constant pursuit of innovation. At this stage of market development it arises from placing capital and working hands-on with entrepreneurs—the hard work required to build the field and accelerate impact.
The 2012 Social Finance Forum: Measuring up, which will be held November 8 and 9, and hosted by the MaRS Centre for Impact Investing, will support this movement. The forum will delve deeply into the opportunities and challenges surrounding impact measurement, while also exploring the other critical elements of what makes a good deal and how existing market opportunities measure up. Since 2008, the Social Finance Forum has been the place to convene Canadian and global leaders and new actors across the private, public and community sectors under one roof, curating diverse perspectives and insights into the ever-changing dialogue of social finance.
This year, attendees of the Social Finance Forum will hear from Gordon M. Nixon and Arlene Dickinson representing mainstream financial interest in the sector. Other featured presenters include Jeremy Nicholls (The SROI Network Intl.), Bart Houlahan (B Lab) and Andy Broderick (Vancity). They will lead conversations around valuing outcomes, the early mover experience, collaborative approaches to impact measurement and community development financing.
Register now to get the early bird rate of $249!