- Amit Bouri is the CEO and co-founder of the Global Impact Investing Network (the GIIN) which provides tools to make impact investing more accessible and effective.
- According to Bouri, the huge wave of interest in impact investing is coming from millennials. He says, “as wealth is transferred to millennials, the data is indisputable that they want sustainability and impact to be part of their investment portfolios.”
- According to research done by the GIIN over 90% of impact investors say the financial performance of their investments meet or exceed their expectations.
- Now, investors want to understand how much impact their investments have, according to Bouri. The GIIN is working on tools to measure social and environmental performance of impact investments, called IRIS.
Following is a transcript of the video.
Sara Silverstein:Can you tell me what the Global Impact Investing Network does?
Amit Bouri:Sure, the Global Impact Investing Network, or the GIIN, for short, is a non-profit organisation dedicated to increasing the scale and effectiveness of impact investing.And so impact investments are investments that are made with the intention of generating a positive social and environmental impact, alongside financial return. And our network includes over 260 organisations in over 35 countries.
Silverstein:Andhow do you find these investments? And do they perform as well as traditional investments?
Bouri:Well, the way you find them it really depends on how you invest. So the first thing, if you have a financial advisor, is to ask for them and increasingly financial advisors are being responsive in figuring out how they can bring products to their clients. But you do have to ask typically. And so it’s important to make your interest known.
In terms of the returns, we see that of the vast majority of impact investors, based on our data, over 90% are meeting their financial objectives through impact investments. And so, we have increasing data and performance research that really attest to the fact that you can achieve market rates of return through impact investments.
Silverstein:And you have more data too coming out soon and could you tell me what you guys found from your most recent survey?
Bouri:Absolutely, so every year we do an annual survey of the leading impact investors. And this year what we found is the market is currently at $US228 billion according to the assets of these investors. And it continues to grow, and so for the past five years, we’ve actually seen growth average around 13% per year. And that’s only based on those investors already in the market. The real story is also, of course, all those people around the world who are just starting to become impact investors. And they represent huge potential, not just in terms of capital, but in terms of the impact that they can have on the world.
Silverstein:And when you look at, when people are trying to have an impact, how do they measure how successful they’re being other than just financial performance?
Bouri:So we’re building a whole new practice around impact performance. There’s so much work that’s been done to understand financial performance. But we essentially have to build a whole new capacity to understand how we have an impact on very complex issues. The good sign that we’re seeing in the market is that investors really want to understand the performance and really want to push the frontier of how we think about performance. So we have a variety of tools, ranging from metrics to measure social and environmental performance, called IRIS, as well as a whole host of resources about how you actually go about building an impact measurement practice. Not only so you can understand how well you’re doing, but so you can manage having an even greater impact with your investments.
Silverstein:And what’s the difference? What’s the trend? Who’s the new capital coming in?
Bouri:So we see actually newentrants in – coming from all different parts of the market. So I was just in Hong Kong last week, and increasingly Asian families, so wealthy families in China, Thailand, Malaysia, and Indonesia are entering the market. A few weeks ago, I was in Denmark, meeting with pension funds and large banks, and institutional investors are increasingly becoming active in impact investing. And then, of course, at the individual level, we see people at all ages, active as impact investors, but the huge wave of interest is coming from millennials. And as wealth is transferred to millennials, the data is indisputable that they want sustainability and impact to be part of their investment portfolios.
Silverstein:And overall, where is the impact investing? Where are we trending?
Bouri:Well I think, you know, impact investing is part of a much bigger trend line. And when you think of all the movement that’s been changing the view of the role of the company, and being more responsive to broader stakeholders, and the way people think about their lives as consumers, and wanting to buy more responsible products. What we’re think- see impact investing as contributing to a broader shift in changing the role of capital, and what we, as a society, expect money to do. And impact investing in many ways is proving that money can do more than just make more money. And I think that’s incredibly exciting and motivating to so many people around the world.
Silverstein:And how can you start to turn companies’ behaviours so that they’re thinking long-term or that they’re taking accountability for everyone that they’re affecting?
Bouri:It’s a really important trend that we’re seeing. A recognition among leaders in finance and leaders in business, that if they want us to stay in long-term performance they have to think about environmental and social issues. I think one thing that we’re excited about working with investors is that they have a lot of influence on how companies think about their performance and what stakeholders they respond to. So as investors start to take social and environmental considerations into account, thinking not just about financial performance, but also the health of the planet and the well-being of communities, that will influence corporate behaviour in the positive direction.
Silverstein:And just speaking to individuals, what would you ask people to do to be a part of this network, to help?
Bouri:Yeah, I think it’s a really exciting time. We’re seeing interests in impact investing booming all around the world. But every individual has a role to play in this market. So if you are a professional money manager, you of course can steer capital into impact investments. If you work at a big firm, you of course can be an advocate within your institution, whether it’s an investor, of course, you can try to get them to make more impact investments, or if you’re operating in a company, you can start to kind of advocate for social and environmental values being incorporated into business. And then ordinary individual investors can start to put capital to work in anything as simple as a savings account, but also those with more assets, of course, have more to invest and more options.
Silverstein:And how did you become so interested in this? Why is this such an important issue for you?
Bouri:Well for me, I had worked in business originally and learned a lot and really wanted to apply myself at something that had a deep sense of purpose and had an impact on the world. And I worked for a non-profit for a while and that was incredibly valuable for me. But I started to see there was a big opportunity to try to bridge the gap between the problems that world’s facing and the resources we have to address it. And with philanthropy and donations and government, they’re all part of the solution, but we need to mobilize the private sector if we really want to have a dramatic impact on issues like climate change and inequality. And that’s what led me to impact investing.
Well and also, it’s personal to me, in large part because of how I was brought up. I was brought up with some trying circumstances, my parents were divorced when I was three. We lived on welfare for six years, while my mum got her feet under her and went to school and was able to get a solid, middle-class job. And from then on, I’ve had tremendous opportunities, and I’m very grateful for those. But I also recognise the fact that many people who start in that place, don’t end up with the same opportunities. So I see impact investing as playing a role and creating opportunities for all and that’s part of what really motivates me to do this work.
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