Impact Investing: Overview and Influencers
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If you are new to impact investing, getting started on your journey may be daunting. After all, there are many resources available to educate you — and perhaps sell you services in the process.
So what is impact investing? The most widely accepted definition comes from the Global Impact Investment Network (the GIIN):
Investments made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return.
The term “Impact Investing” was coined at a Rockefeller Foundation gathering in Bellagio, Italy in 2007. The multiple public, private and nonprofit sector leaders in attendance recognized that private capital could help fill the gap between global development funding needs and the resources available through philanthropy and government aid.
Clearly, investing for a social or environmental purpose existed in various forms before the term “impact investing”. However, in recent years we’ve seen growth and professionalization of the industry coalesce around the impact investing movement. It is now less fragmented thanks to increased coordination among a variety of global, national and local efforts. Below are some of our favorites.
The Global Impact Investing Network (GIIN)
Recognized as industry leader, the GIIN is committed to growing the impact investing marketplace. Its website provides an excellent primer on the basics.
The GIIN is continually publishing research and thought-leadership to help shape this quickly evolving ecosystem. Its Impact Investor Survey (published annually each spring) provides real-time data on the state of the market based on “an analysis of the world’s leading impact investing organizations, including fund managers, foundations, banks, development finance institutions, family offices, pension funds, and insurance companies.” Also of note is the GIIN’s publication: Roadmap for the Future of Impact Investing: Reshaping Capital Markets, which presents presents “a vision for more inclusive and sustainable financial markets and articulates a plan for impact investing to lead progress toward this future”.
The GIIN promotes its IRIS metrics as a catalog of generally-accepted performance metrics for understanding and describing impact. It also runs ImpactBase, searchable, online database of impact investment funds and products designed for investors.
The Case Foundation
The Case Foundation continues to be a leader and influencer in the growing field of impact investing. A Short Guide to Impact Investing: A Primer on How Business Can Drive Social Change (updated in October 2015) remains a must-read for anyone new to impact investing. Quotes introduce chapters, keeping the tone light in this relatively short (50 pages) primer. It provides a broad but not in-depth overview of many aspects of impact investing — from frameworks to asset classes to impact measurement.
To further build the ecosystem, The Foundation created the Impact Investing Network Map to “demonstrates the publicly available transactions between investors and companies within impact investing.” This initiative highlights the importance of transparency and disclosure to impact investing’s growth.
The Case Foundation also created an interactive timeline to celebrate 10 years of growth in the field. This is a great resources for anyone interested in key milestones and pioneers who contributed to the sector’s first decade.
Social Capital Markets (SOCAP)
SOCAP is “dedicated to accelerating a new global market at the intersection of money + meaning.” It does this primarily through its annual flagship event. This is the largest conference to “bring together impact investors, social entrepreneurs, philanthropists, business leaders and other innovators from across the world in a unique cross-sector approach to catalyze collaboration for change.”
What’s great about SOCAP for the new impact investor is that many of the panels and presentations from past events or archived on its YouTube site and available for viewing.
Impact Alpha
Impact Alpha is a new media brand that “delivers high-quality original content and company and investor data to accelerate the growth of the impact market.” Billed as investment news for a sustainable edge, this subscription based service provides continually updated information on impact investing through daily briefing, podcasts, articles and several theme-focused series.
Impact Alpha also runs ImpactSpace, an open and searchable database that “tracks investments in solutions to environmental and social challenges.”
The list above is by no means exhaustive, merely a starting point. Other influential organizations include:
- US Impact Investing Alliance
- Big Path Capital
- The Rockefeller Foundation
- Global Social Impact Investment Steering Group (GSG)
- Impact Management Project
- Organization for Economic Cooperation and Development’s (OECD’s) Data Working Group on Impact Investment
- Toniic
