Today, many of the world’s largest private and public organizations support a mission to work on solving the world’s most prominent problems. This includes helping to fight poverty, advocating for human rights, and protecting the Earth’s climate. However, the question arises, are these large organizations are doing enough? Are we neglecting an obvious tool for impact? In a world in which economic and financial systems directly shape environmental and social conditions, are our investments helping to advance our mission or are they undercutting it?1
Many organizations and foundations are setting goals to commit their assets to impact investing. However, setting a goal is just the first step. The US SIF: The Forum for Sustainable and Responsible Investment, recently released its Report on U.S. Sustainable, Responsible and Impact Investing Trends, which suggests that philanthropic foundations are only scratching the surface of their potential.2 There is so much room to grow in this market. Organizations have the potential to make a great impact on the world, but they must utilize resources and be fully committed to this cause.
Figure A3 represents how much “Sustainable and Responsible Investing” or impact investing has grown since 1995. In recent years, growth has been the largest.
Organizations are paying more attention to the benefits that can come from impact investing – financially and socially. Numerous studies show that sustainable and responsible investors do not have to sacrifice returns to align their investments with their values.4 For example, the F.B. Heron Foundation in 2012, set a goal to allocate all its endowment to impact investments by 2017. The F.B. Heron Foundation reached that goal in December 2016, ahead of schedule, and even created its own system and metrics to evaluate the impact investments in their portfolio.
With the many struggles the world is facing today, we believe it is imperative to deploy our resources to fight for a better world, and that includes using our investments for impact.
1 Commentary: Are We Squandering Opportunity for Impact? https://www.pionline.com/industry-voices/commentary-are-we-squandering-opportunity-impact
2 Commentary: Are We Squandering Opportunity for Impact? https://www.pionline.com/industry-voices/commentary-are-we-squandering-opportunity-impact
3 The Forum for Sustainable and Responsible Investment https://www.ussif.org/sribasics
4 Commentary: Are We Squandering Opportunity for Impact? https://www.pionline.com/industry-voices/commentary-are-we-squandering-opportunity-impact