Experts offer advice on how to join impact investing sector that’s primed for growth
  • New guides attempt to present the nuts-and-bolts of impact investing.
  • Impact investing tightens the link between Wall Street and Main Street.
  • Since 2012, sustainable and responsible investing has grown by more than 300 percent to $12 trillion in 2018, according to US SIF. 

In the midst of a global pandemic, social unrest and economic confusion, one certainty is that impact investing continues to grow. But for many investors, the key dilemma remains: How do you do well by doing good?

Enter the Rockefeller Philanthropy Advisors. On Thursday, the nonprofit that currently advises on and manages more than $200 million in annual giving will publish “Impact Investing Handbook: An Implementation Guide for Practitioners,” which aims to be a primer of sorts for such investors. The guide is designed for mission-driven asset owners, such as private and community foundations, endowments, and high-net-worth individuals and families who want to effect social and environmental changes through their investments.

“We, as citizens, want to do more with less,” said Patrick Briaud, who co-authored the guide with Steven Godeke, of Godeke Consulting. “If you have fewer assets, you want to do more with them. You want your charitable dollars to make a difference. You want your investment dollars to make a difference.”

Markets, Briaud told Karma, don’t really reflect what’s going on in the world. “Impact investing is what’s tightening that connection between Wall Street and Main Street, so that the economic system reflects what’s on the ground,” he said.

Impact investing has been on the upswing in the last 10 years. Since 2012, sustainable and responsible investing has grown by more than 300 percent to $12 trillion in 2018, accounting for one in every four investment dollars, according to US SIF, The Forum for Sustainable and Responsible Investment.

Such growth fuels more interest in the sector, but some newcomers have complained about the lack of clear information on sustainable investing. (Earlier this week, the Impact Frontiers Project released its own guide “Impact-Financial Integration: A Handbook for Investors,” which examines the benefits and risks of impact investing and discusses how to make decisions and set goals.)

The Rockefeller Philanthropy Advisors (RPA) guide aims to engage the reader by following a year in the life of a 45-year-old female avatar named Sophia, a former fashion house owner. Having sold her business to a large corporation, Sophia wants to invest in environmental assets, because she has become familiar with the waste and heavy water usage in her former industry. She and her husband set up a $40 million family foundation and, through a series of exercises and definitions, the reader learns the hows and whys of her decisions and how she selected the right partners.

“Understanding that you are an asset owner is a critical first step in establishing your impact investing strategy,” Godeke and Briaud wrote. “From individuals to large institutions, a broad range of asset owners exist — each with distinct capabilities and resources, which will guide their practices.”

The RPA handbook concludes with Sophia progressing in her commitment to impact investing, including divesting investments in weapons manufacturers due to her husband’s disdain for gun violence. The most important take-away from the handbook, maintains Briaud, is that “All assets have impact.”

“If you own anything or buy anything, you have an impact on the world,” he said. “Look at what you own. If you care about ESG [environmental, social, governance issues], it will help you do that. If you care about catalytic capital, this will help you do that, too.”

Photo by Cindy Ord/Getty Images