Ted Jackson. School of Public Policy and Administration. Carleton Centre for Community Innovation. Presented to the Research Works Luncheon Session,. Senate Room, Carleton University, November 1, 2012. ID: 322321
DownloadNote - The PPT/PDF document "The Rapid Globalization of Impact Invest..." is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Presentations text content in The Rapid Globalization of Impact Investing
Slide1
The Rapid Globalization of Impact Investing
Ted Jackson
School of Public Policy and Administration
Carleton Centre for Community Innovation
Presented to the Research Works Luncheon Session,
Senate Room, Carleton University, November 1, 2012
Slide2
2
Core Issue
Impact Investing is growing across the globe, but so far this growth has been driven mostly by investors from the Global North. How to effectively engage investors from the fast-growing new economic powers, and the low-income countries, is a challenge that this new field must meet directly, with energy and creativity.
Slide3
Current Context
Slow economic growth globallyHigh unemployment and growing inequalityPressure to reduce western aid budgetsContinued ascendance of new economic powers: China, India, Brazil, South Korea, IndonesiaIncreased importance of G-20 in global governanceIncreased development assistance and trade on the part of the new powersNeed and opportunity to lever private sector capital to address pressing social issues
3
Slide4
Investments intended to create positive impact beyond financial return
Provide
capitalTransactions currently tend to be private debt or equity investmentsWe expect more publicly traded investment opportunities will emerge as the market matures
Businesses designed with intentThe business (fund manager of company) into which the investment is made should be designed with intent to make a positive impactThis differentiates impact investments from investments that have unintentional positive social or environmental consequences
… to generate positive social and/or environmental benefitPositive social and/or environmental impact should be part of the stated business strategy and should be measured as part of the success of the investment
Expect financial returnsThe investment should be expected to return at least nominal principalDonations are excludedMarket-rate or market-beating returns are within scope
Source: JP Morgan, Rockefeller Foundation and GIIN, 2010
4
Slide5
5
Impact Investing: Mapping ReturnsSource: Adapted from Monitor Institute 2009, via Rockefeller Foundation , 2011
Impact
First
Low Impact
and
Low Financial Returns
Philanthropy
Social Returns
Financial
Returns
i
Financial
First
Low
High
High
Subsidized Investments
Grants
Below
Market
Market
Related
Traditional
Investments
SRI (“Do No Harm”)
Impact
Investments
Slide6
Actors in the Impact Investing Industry
6
Slide7
Examples of Impact Investments
7
USA
INDIA
TANZANIA
Investee
:
M’tanga
Farms
Investors
:
Calvert Foundation, Lion’s Head Global Partners
Investee:Investors: and
Investee:
Investors
:
CHILE
Investee
:
LGBT Enterprises in Latin America
Investors:
and
supported by
NESsT.org
Slide8
Mapping the Impact Investing Industry
8
USA
CHINA (HONG KONG)
NETHERLANDS
UK
INDIA
BRAZIL
SOUTH AFRICA
KENYA
MEXICO
GERMANY
SINGAPORE
AUSTRALIA
The Sterling Group
Slide9
Capital Growth
9
Slide10
Value of Reported Investments, by Region, 2011
10
Source:
Saltuk
,
Bouri
and Leung,
“Insight
into the Impact Investment Market
,” 2011
Slide11
What Impact Investing is Not
Not a silver bullet / panaceaNot implying that every social issue can be solved through market-based approachesNot replacing the important role of philanthropyNot an excuse for governments to ignore their obligations to marginalized populations or their obligations to redistribute wealth
11
Slide12
The Potential of Impact Investing
The ability to unlock new types of capital to address a range of social issues, and to combine capital in creative waysAn opportunity to address the limitations of traditional investment approaches that narrowly focus on financial returnsA desire by some wealthy investors to generate both financial and social returns
12
Slide13
13
Slide14
14
Slide15
What Should/Could Carleton Do? (I)
Ottawa/Eastern OntarioEngage Canadian impact investors to finance LTW and other Carleton-affiliated enterprises that can generate social or environmental benefitsAccelerate efforts to commercialize and scale social-purpose technology in priority sectors: health, the environment, sustainable energy, etc.Integrate impact investing strategies and actors into promotion of regional economic developmentBecome an impact investor in affordable housing and social infrastructure, through partners and intermediaries (e.g., CMHC)
15
Slide16
What Should/Could Carleton Do? (II)
GlobalUse evaluation to hold impact investors to account for their declared intentionsConduct independent, critical research on effectiveness of models and tools in impact investing in various sitesDesign/facilitate “triangle” interventions involving a western country, a new economic power and a low-income countryConsider hosting professional training in impact investing at Carleton (e.g., “IPDET for impact investing”)
16
Slide17
Resources
Bugg-Levine, A. and J. Emerson. Impact Investing: Transforming How We Make Money While Making a Difference, 2011.Gates, B. “Innovation with Impact: Financing 21st Century Development,” Report to the G-20 Leaders, Cannes, 2011.Global Impact Investing Network: thegiin.orgHarji, K. and E.T. Jackson. “Accelerating Impact: Achievements, Challenges and What’s Next in Building the Impact Investing Industry,” Rockefeller Foundation, 2012.J.P. Morgan, GIIN, Rockefeller Foundation. “Impact Investments: An Emerging Asset Class,” 2010.Monitor and the Acumen Fund. “From Blueprint to Scale: The Case for Philanthropy in Impact Investing,” 2012. Monitor Institute, “Investing for Social and Environmental Impact: A Design For Catalyzing An Emerging Industry,” 2009. SVT Group. “Catalog of Approaches to Impact Measurement,” 2008.United National Development Program “Innovative Financing for Development: A New Model for Development Finance,” 2011.
Download this presentation
DownloadNote - The PPT/PDF document "The Rapid Globalization of Impact Invest..." is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Presentations text content in The Rapid Globalization of Impact Investing
The Rapid Globalization of Impact Investing
Ted Jackson
School of Public Policy and Administration
Carleton Centre for Community Innovation
Presented to the Research Works Luncheon Session,
Senate Room, Carleton University, November 1, 2012
Slide22
Core Issue
Impact Investing is growing across the globe, but so far this growth has been driven mostly by investors from the Global North. How to effectively engage investors from the fast-growing new economic powers, and the low-income countries, is a challenge that this new field must meet directly, with energy and creativity.
Slide3Current Context
Slow economic growth globallyHigh unemployment and growing inequalityPressure to reduce western aid budgetsContinued ascendance of new economic powers: China, India, Brazil, South Korea, IndonesiaIncreased importance of G-20 in global governanceIncreased development assistance and trade on the part of the new powersNeed and opportunity to lever private sector capital to address pressing social issues
3
Slide4Investments intended to create positive impact beyond financial return
Provide
capitalTransactions currently tend to be private debt or equity investmentsWe expect more publicly traded investment opportunities will emerge as the market matures
Businesses designed with intentThe business (fund manager of company) into which the investment is made should be designed with intent to make a positive impactThis differentiates impact investments from investments that have unintentional positive social or environmental consequences
… to generate positive social and/or environmental benefitPositive social and/or environmental impact should be part of the stated business strategy and should be measured as part of the success of the investment
Expect financial returnsThe investment should be expected to return at least nominal principalDonations are excludedMarket-rate or market-beating returns are within scope
Source: JP Morgan, Rockefeller Foundation and GIIN, 2010
4
Slide55
Impact Investing: Mapping ReturnsSource: Adapted from Monitor Institute 2009, via Rockefeller Foundation , 2011
Impact
First
Low Impact
and
Low Financial Returns
Philanthropy
Social Returns
Financial
Returns
i
Financial
First
Low
High
High
Subsidized Investments
Grants
Below
Market
Market
Related
Traditional
Investments
SRI (“Do No Harm”)
Impact
Investments
Slide6Actors in the Impact Investing Industry
6
Slide7Examples of Impact Investments
7
USA
INDIA
TANZANIA
Investee
:
M’tanga
Farms
Investors
:
Calvert Foundation, Lion’s Head Global Partners
Investee:Investors: and
Investee:
Investors
:
CHILE
Investee
:
LGBT Enterprises in Latin America
Investors:
and
supported by
NESsT.org
Slide8Mapping the Impact Investing Industry
8
USA
CHINA (HONG KONG)
NETHERLANDS
UK
INDIA
BRAZIL
SOUTH AFRICA
KENYA
MEXICO
GERMANY
SINGAPORE
AUSTRALIA
The Sterling Group
Slide9Capital Growth
9
Slide10Value of Reported Investments, by Region, 2011
10
Source:
Saltuk
,
Bouri
and Leung,
“Insight
into the Impact Investment Market
,” 2011
Slide11What Impact Investing is Not
Not a silver bullet / panaceaNot implying that every social issue can be solved through market-based approachesNot replacing the important role of philanthropyNot an excuse for governments to ignore their obligations to marginalized populations or their obligations to redistribute wealth
11
Slide12The Potential of Impact Investing
The ability to unlock new types of capital to address a range of social issues, and to combine capital in creative waysAn opportunity to address the limitations of traditional investment approaches that narrowly focus on financial returnsA desire by some wealthy investors to generate both financial and social returns
12
Slide1313
Slide1414
Slide15What Should/Could Carleton Do? (I)
Ottawa/Eastern OntarioEngage Canadian impact investors to finance LTW and other Carleton-affiliated enterprises that can generate social or environmental benefitsAccelerate efforts to commercialize and scale social-purpose technology in priority sectors: health, the environment, sustainable energy, etc.Integrate impact investing strategies and actors into promotion of regional economic developmentBecome an impact investor in affordable housing and social infrastructure, through partners and intermediaries (e.g., CMHC)
15
Slide16What Should/Could Carleton Do? (II)
GlobalUse evaluation to hold impact investors to account for their declared intentionsConduct independent, critical research on effectiveness of models and tools in impact investing in various sitesDesign/facilitate “triangle” interventions involving a western country, a new economic power and a low-income countryConsider hosting professional training in impact investing at Carleton (e.g., “IPDET for impact investing”)
16
Slide17Resources
Bugg-Levine, A. and J. Emerson. Impact Investing: Transforming How We Make Money While Making a Difference, 2011.Gates, B. “Innovation with Impact: Financing 21st Century Development,” Report to the G-20 Leaders, Cannes, 2011.Global Impact Investing Network: thegiin.orgHarji, K. and E.T. Jackson. “Accelerating Impact: Achievements, Challenges and What’s Next in Building the Impact Investing Industry,” Rockefeller Foundation, 2012.J.P. Morgan, GIIN, Rockefeller Foundation. “Impact Investments: An Emerging Asset Class,” 2010.Monitor and the Acumen Fund. “From Blueprint to Scale: The Case for Philanthropy in Impact Investing,” 2012. Monitor Institute, “Investing for Social and Environmental Impact: A Design For Catalyzing An Emerging Industry,” 2009. SVT Group. “Catalog of Approaches to Impact Measurement,” 2008.United National Development Program “Innovative Financing for Development: A New Model for Development Finance,” 2011.
17