Why should investors join the impact investment movement? IIX interviewed ICCO Investments’ CEO, Mark Joenje, for a candid look into the opportunities and challenges for investors within the space.
One of the major challenges surrounding the work we do in the impact investing space is measuring the actual impact we create and making the investor feel the importance and need for the impact assessment. It is a rather daunting task to assess social change, when “impact” is a fuzzy concept to quantify.
I had a simple goal in life – to make finance do good for the world. That is why I joined Morgan Stanley at 21 and saw how finance brought amazing opportunities to the society (it did some bad things as well but let’s not go into that today). I wanted to take the magic of capital markets back to my poor country Bangladesh. Thus, with a head full of idealism and heart full of optimism, I left Morgan Stanley and returned to Bangladesh. There I joined Grameen Bank and worked on Grameen Bank’s first financing round, in effect bringing Grameen Bank to the world of capital. All this was almost 25 years ago and I am still at it. I still ardently believe that the right kind of investment capital and the emergence of social capital markets can make the world a more equitable place. Interestingly it is happening now and it is happening through what is known as ‘impact investing’.
The first question anyone who is introduced to the impact investing world invariably asks is, ‘Can you have investments that can create immediate positive impact?’ and the second question is ‘Can you measure that impact?’. The answer to both these questions as we know is a resounding Yes, but then to explain how that happens takes a while – for most people the impact measurement field is a completely unknown one. Thus, to grasp the nuances around it becomes difficult without understanding the basic terms.
In keeping with this quarterly’s theme of millennials, we set out to share the perspective of an organization that delves deep into issues of youth engagement here in Singapore – The Thought Collective. Starting out as an initiative to tackle youth apathy through education, The Thought Collective has evolved into an umbrella of social businesses whose mission is to collectively transform and strengthen social and emotional capital in Singapore.
In India, where one third of its billion-strong population live in urban areas, the colossal issue of urban waste threatens to take over liveable spaces. As gigantic landfills expire and overflow – some, like in Mumbai, are the size of Central Park in New York and as dated as 90 years old – reducing the amount of disposables that go into the trash is an urgent endeavour.
Impact Investment has developed rapidly over the past decade, representing the confluence of development goals with financial sustainability and discipline. At the heart of the sector are Impact Enterprises (IEs), and it is in response to their requirements for capital to grow that the rapid evolution of the sector has been necessitated. As the early IEs have scaled, a common theme that consistently emerges is the need to leverage equity by accessing debt at the appropriate time.