Social impact investing: special focus
"Investing for impact is the most
Impact investing – putting money to work both for profit and social impact – is in its infancy as an industry. But it has the potential to become part of the fabric of financial markets. A group of leading wealth managers, foundations and sector specialists discuss how impact investment will develop, and the challenges they face.
"The scale of problems is beyond
With public spending being cut, wealthy individuals are putting more of their philanthropic dollars to work through social-impact investing. Companies are being set up to provide advice and products. And that means private banks are having to consider new offerings and services to their biggest clients.
From the archive:
Some $30 trillion will transfer from the baby-boomers to their children and grandchildren in the next 30 years. These younger generations think differently and bank differently. Private banks must adapt their businesses to ensure the money stays with them.
Political climate increases pressure on wealthy to adopt mainstream tax structures.
"Clients are also looking at the huge spectrum of possibilities to become active in the philanthropy sector and for advice on how to get engaged and succeed in their philanthropic endeavours."
Impact investing is not the sole preserve of corporate institutions. Individuals are increasingly applying this investment practice – by assessing the social return on investment and a given charity's cost-to-income ratio, for example – to maximise returns on donations
In a society obsessed with maximizing profit, Muhammad Yunus, Nobel Peace Prize winner and pioneer of microfinance through Grameen Bank in Bangladesh, has a new goal: to get business and finance to take off its ‘profit-maximizing glasses’ and think about its role in society instead.
The forced removal of Grameen Bank founder Muhammad Yunus as head of the lender casts a shadow over an institution that has flourished in Bangladesh and spread its message around the world.
As more investors wonder how fund managers are weighing environmental, social and corporate governance factors in their investment decisions, the evidence that these factors can positively impact performance is growing.
Big banks are beginning to look beyond the kudos that socially responsible investment brings and are introducing microfinance to the capital markets as a viable, profitable business.