Socially responsible investing is obviously optimal. But despite its potential only a small fraction of capital is being used to balance social, environmental and economic impact. Watch the short video from The World Economic Forum on how to make impact investing widespread:
Wouldn’t it be a good idea to make investments that both get a high financial return and have great social and environmental impact? But investors continue to focus mainly on financial returns. Are we ever going to reconcile the shortcomings of the financial markets? So far only about US$40 billion out of tens of trillions of dollars have been committed to impact investment.
Are investments without value a good idea?
Wayne Silby, the founder of Calvert, put it this way: “As the global economic crisis shows, money without values doesn’t create the world that we want”.
Amy Bell of J.P. Morgan believes that once a new breed of investors move into impact investing and begin to have success there will be a next wave. She fully expects that today’s sceptics will at some point be part of the wave.
“We have seen impact investing becoming more and more popular during the last couple of years”, says Abigail Noble of The world Economic Forum. Investors don’t only want to create financial returns but also do well in the world. And Goldman Sachs‘`Andrea Philips stated that they are really excited about the growing emphasis on impact investing.
The conclusionin Davos was that the more we start thinking of the environment and social justice the less volatile and more sustainable the world will be.
Do you agree that the world needs more impact investing? Will the interests of the young generation influence investors to opt for impact investing? Will it move from being the domain of the smart philanthropist to a part of how businesses are run? Will people in the financial markets take a much more holistic view in the future? Will more capital be allocated to impact investment? Or do you think investors should only focus on financial returns?
Video: World Economic Forum – Picture: Dave Center