6 Signals through the Impact Investing Noise

The last few months I have found myself speaking about impact investing at conferences, and with a mic in hand I have bemoaned about the cacaphony of noise versus the lack of signals in the space. 5 years ago, I looked forward to new reports coming out, because I was craving to see how other people were seeing in the sector I was entering. Now I feel like I am swimming in reports. There are times when multiple long form reports are released in the same week, who can keep up? We are trying to practice in the space, right?

There in lies the next challenge, as the space grows, we (myself) included are trying to validate our expertise by creating blogs, white papers, tweets, reports, books, etc. Which in one respect I understand, because if you haven’t seen me speak in person, or don’t know me, how would you know what I know to know you’d want an intro? On the other hand, a lot of the reports coming out are the same information over and over again, with snippet here or there of something new. Hence the lot of noise, not enough signals.

I have purposely held back from writing about impact investing in depth, because I want what I write to be different that I what I am reading. I am more that happy to point you in the direction of amazing resources that are already out there, since re-creating the wheel doesn’t add value.

Looking for a quick 10 minutes or less primer on impact investing, the Case Foundation has a fantastic piece. Easy peesy to digest.

If you are looking for a more indepth read, that is candid on where we are today in the space. Cathy Clark, Jed Emerson, & Ben Thornley published a book called The Impact Investor: Lessons in Leadership & Strategy for Collaborative Capitalism that is solid.

Here are the 6 signals you should be keeping your eyes on:

1. Collective Impact — the problems that social enterprises are trying to solve are challenging ones. A social enterprise is only one component to the overall solution, and in order for them to be successful they need to be able to pull in a variety of stakeholders from government, civic, and business circles. The fact we are having a conversation about this, is refreshing.
2. Resilient and Sustained impact — social enterprises need to be able to sustain their impact beyond year 1 and year 2, and that impact needs to be able to survive shocks to the local economy.
3. Base of the Pyramid is no longer just about developing and frontier markets, but rather, the location. BoP exists in every country of the world, there in lies opportunity.
4. Impact measurement is the white elephant in the room that everyone is talking about, but not sure how to solve. The emergence of the concept of resilient impact is one that will drive how we look at impact measurement in the future. As in what are the indicators we can look for in the short term versus the long term, and how are we identifying what the baseline numbers are.
5. Questioning investment alignment — from family foundations to corporations to endowments, there are increasing questions about whether the investments in public and private markets these organizations use in their treasury management strategies are aligned with their mission, values, and overall strategy.
6. Consumers continue to drive the market, whether they themselves receiving the impact through the purchase, or having an impact on someone else by making the purchase. However, increasing there more social enterprises and impact investment opportunities that involve B2B and B2G solutions.