Key Takeaway: Panelists at the Global Impact Investing Network Investor Forum in Amsterdam challenge investors to change portfolios to reflect urgent global needs
Impact investing has taken on a sense of urgency that didn’t exist a few years ago.
Youth-led climate strikes, boycotts and divestments from companies that aren’t seen as sustainable have created global pressure for investments that create social and environmental change. And the time to act is now, according to the thousand attendees at last week’s annual Global Impact Investing Network Investor Forum (GIIN) in Amsterdam.
Matt Christensen of AXA Investments, which is aligning its portfolio to future global warming outcomes, put it directly on one forum’s panel: “If you say you’re an impact investor, prove it. How has your portfolio changed? How are you measuring impact?”
In a report released at the forum, GIIN took a giant step toward helping investors answer those questions by introducing a new approach to investing that compares impact performance across sectors. The approach also addresses concerns about transparency that have hindered impact investing in the past.
The GIIN report aggregated investment-level data on projects in the clean energy and housing sectors and found that rigorous comparison is possible New investors inspired by the climate protests are a target audience.
“This approach is crucial as the market welcomes new players keen to create positive social or environmental impact through their investments,” Rachel Bass, GIIN’s research manager and a co-author of the report, told Karma. “These industry efforts advance investors’ ability to speak the same language when it comes to impact.”
A major concern for the investors gathered in Amsterdam — along with Queen Maxima of the Netherlands, who joined the audience on the forum’s first morning — was the risk of being caught flat-footed amid a global shift in thinking about society and the environment.
Pressure to Change
In her opening welcome, Triodos Investment Management Managing Director Marilou von Golstein Brouwers quoted climate activist Greta Thunberg: “The time for empty words is over.” Mainstage speakers including Swedbank Robur CEO Liza Jonson acknowledged the pressure from climate protesters. In one panel on diversity and inclusion, Village Capital CEO Allie Burns pushed attendees to look beyond the status quo of what she called “extractive capitalism.”
“This approach is crucial as the market welcomes new players keen to create positive social or environmental impact through their investments.”
“We need an entirely new paradigm for decision-making that is inclusive,” she said.
The boldness of the arguments is new for a sector that began as a small subset of traditional finance. Across panels on climate change, refugees, affordable housing, indigenous rights, and gender equality, participants seized a $2.6 trillion funding shortfall to meet the SDGs as the common thread for understanding the urgent need for change
“One underlying theme that weaved its way through [the forum] was the pressing need to leverage global resources, assets, and momentum toward meaningful change,” Perry Teicher, an impact finance attorney at Orrick, Herrington & Sutcliffe, told Karma.
Social Finance Netherlands co-founder Björn Vennema agreed. “We’re ready for impact to become a standard element of investment,” he told Karma, pointing out the host country’s role as a pioneer on impact-oriented pension funds. “The urgency is really being felt.”