Just like any other type of investment, impact investing does not operate in a vacuum. Environmental factors like culture and policy shape the investments that we make, from investable opportunities to the type and supply of capital available. Figuring out the role of policy in impact investing can be complicated, as policy and its impacts can differ from country to country and often involve multiple layers of government across a variety of issues.
In early May, I had the opportunity to attend a meeting with Ben Thornley of InSight at Pacific Community Ventures at the Rockefeller Foundation offices in Nairobi, and meet teams who are working on developing impact investing policy recommendations in their own countries of Ghana, Kenya, Liberia, Nigeria, Senegal, and South Africa. Most of these groups are looking at small business and microenterprise development, a small slice of the impact investing universe, which narrows potential investment opportunities and problems the policies will be working to solve to a more manageable number. While each country faces its own unique challenges, the policy recommendations that will develop are likely to be significantly different than what we would expect to see in the U.S. or Europe.
Speaking at the Responsible InvestorESG USA 2012 conference in New York City, IRI Visiting Fellow Jay Youngdahl briefly chats about how legal culture slows the incorporation and adoption of ESG into pension fund investments. “To truly provide a proper fiduciary duty to one’s beneficiaries, one must look for financial returns to be sure, but they must do it in a way that is sustainable, that is holistic, and that helps the beneficiaries as much as possible…it is really a question of whether the lawyers representing the funds have the courage to do what their trustees want to do in terms of seeing fiduciary duty as a way to do the best job overall for the beneficiaries.”
The IRI will be exploring this topic more in depth at its upcoming Trustee Leadership Forum for Retirement Security meeting on May 30-31. Stay tuned for more information on this project!
More for Mission and the PRI Makers Network are pleased to announce that they have become one organization: Mission Investors Exchange. The new integrated organization is the mission investing community where philanthropic innovators exchange ideas, tools, and experiences to increase the impact of their capital. It will provide resources and education about both program-related investments and mission-related investments, looking at the entire spectrum of foundation investments.
The IRI, as a strategic partner of the Mission Investors Exchange, will continue research on the field of mission investing, focusing through 2012 in particular on the role of philanthropic capital in mobilizing private capital markets and the impact of foundation culture on mission investing decision-making.
Follow the Mission Investors Exchange on Twitter @missioninvest, and visit the website for conversation, events, tools and resources.
