Interest in impact investing—the practice of investing with the intention to generate measurable social and environmental impact alongside a financial return—has hit a fever pitch. Various factors are contributing to growing awareness, with the prospect of servicing latent client demand (i.e., future business growth) being chief among them. A number of financial institutions are utilizing parts of their institutional platforms as a result, but less observable has been a push towards aligning these programs with various organizational functions, including: advising, originating, trading, managing, and distributing capital. The fragmentation of practice is raising questions over how to approach these activities and optimally integrate them within a leading global financial institution.
The new special report Serving Client Demand for Impact Investing: A Hands-on Guide for Financial Advisors and Senior Management, produced by Impact Economy in conjunction with MMI, explores this topic further.
As discussed in the report, financial institutions are struggling with different elements of impact investing strategies—including the sourcing of investments and building fund portfolios, as well as obtaining adequate financial and impact related data. These issues limiting the growth of impact investing overall, and within the financial services industry in particular are, in turn, creating a number of conditions for pushing it forward. Chief among them is the opportunity for financial institutions to take a more systemic approach and actually leverage the full spectrum of their resources, expertise, and infrastructure to match diverse client demand and build viable pipelines of investible deals.
Many of the firms profiled in the report are essentially pursuing components of this approach—using philanthropy, Community Reinvestment Act (CRA)-motivated lending, Environmental, Social and Governance (ESG) and Socially Responsible Investing (SRI), and wealth or asset management to match bespoke client demand or meet narrow compliance requirements. But they, and others, could go further and optimize both the impact and financial proposition of these kinds of investments by venturing to actually align them; making impact both commercially viable and socially transformative.
A copy of the full report, Serving Client Demand for Impact Investing: A Hands-on Guide for Financial Advisors and Senior Management, is available for members of MMI. Members and non-members alike can read an “Overview of Findings.”
Join us on Wednesday, May 14th at noon Eastern Time for a special webinar that reprises a well-received impact investing panel discussion from this year’s MMI Annual Convention. Learn more details and register.
The conversation will also continue at the 2014 Impact Economy Symposium & Retreat from June 13-15 at a Swiss Castle overlooking Lake Constance and close to Zurich. Want to learn more? Interested in sponsoring the event and contributing to the creation of content? Please reach out to us at firstname.lastname@example.org
This post is the first of a five part series that will examine various topics related to the report and include key excerpts. Keep checking back for more updates.
William Burckart is the Managing Director of Impact Economy (North America). Reach him by email at William.email@example.com or on twitter at @impact_economy