“Every company must not only deliver financial performance, but also show how it makes a positive contribution to society”.
- Larry Fink, Chairman and CEO Blackrock, 2018.
Social Impact Investing – in a nutshell
Social Impact Investing – also known as “Investing for Impact” – refers to the practice of investing with the intention of generating measurable social outcomes, while delivering a financial return to the investor.
Social Impact Investments take into consideration non-financial factors such as environmental, social and governance (ESG) considerations.
As concerns regarding scarcity and inequality exacerbate, many investors – including financial institutions – are becoming increasingly interested in achieving not just economic profits, but also social good. One mechanism for this is Impact Investing.
There is, however, a significant obstacle. Although the business world already has universally-accepted metrics (such as ROI, IRR etc) for measuring a potential investment’s financial yields, there is yet to be a standardised tool for evaluating hoped-for social and environmental returns in dollar terms. As a result, forecasting gains from Impact Investments is too often a matter of “guesstimates”.
Sources: Havard Business Review (2019), Gen Advisory analysis.
Our research to date on “Social Impact Investing” is displayed below.
How Gen Advisory can assist financial institutions on Social Impact Investing (SII)
Drawing from our toolkit of services, ways in which Gen Advisory can assist financial institutions on SII include the following:
- • Ascertaining the institution’s understanding of, and receptiveness to, SII.
- • Delivering bespoke training on SII.
- • Delivering bespoke research on a specific SII-related area of interest.
- • Designing an institution-specific technical assistance programme on SII.
- • Managing and executing, on the institution’s behalf, a project on SII.
- • Conducting due diligence on prospective SII partners.