Klaus Tischhauser
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Klaus Tischhauser

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Measuring the impact of investments remains a main challenge for sustainable finance professionals and, together with Climate Change, an overarching theme at TBLI. Sixteen related workshops offer ...

Measuring the impact of investments remains a main challenge for sustainable finance professionals and, together with Climate Change, an overarching theme at TBLI. Sixteen related workshops offer debate on ESG and Impact Investing trends, private equity, portfolio strategy, food production, emerging markets, sustainable energy or philanthropy investing.

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Klaus Tischhauser Klaus Tischhauser Presentation Transcript

  • Impact Investing – Trends and Developments Changing gears to D: Adding «development» to the ESG-framework responsAbility Investments AG www.responsAbility.com Klaus Tischhauser TBLI Conference Zurich November 2013
  • Impact Investments and SRI/ESG Some key observations  Impact Investments commonly considered as being part of the overarching market of Sustainable Investments  Sustainable Investments market historically and volume-wise dominated by SRI/ESG concepts  Impact Investments predominantly associated with the ‘S’ aspect  What does ‘S’ normally stand for? responsAbility Investments AG www.responsAbility.com Changing gears to D Page 2
  • Impact Investments and SRI/ESG Purpose, scope, objectives EFFAS Definition of ESG KPIs: 1) Energy efficiency;  Optimize existing activities of existing companies 2) Greenhouse gas (GHG) emissions;  Reduce/avoid negative impacts, externalities 3) Staff turnover;  Lower risk 4) Training & qualification;  Link to developing countries through local production and anticorruption aspects 5) Maturity of workforce; 6) Absenteeism rate; 7) Litigation risks; 8) Corruption; 9) Revenues from new products. responsAbility Investments AG www.responsAbility.com Changing gears to D  How about Impact Investments? Page 3
  • The four Impact Investment segments Mix of social and developmental objectives Community Development Finance Social Impact Bonds Social Entrepreneurship & Venture Philanthropy Development Investments Regulation driven (Community Reinvestment Act CRA of 1977) activities mainly by US financial intermediaries. Access to finance, low income housing etc. in the US. Forced activity. Pay-for-success schemes. Governments outsource public responsibilities to private sector. Attraction of private sector money through bond-like structures. Provision of various types of capital to companies with a social mission. Use of Venture Capital rigor with NGO or philanthropic activities to increase efficiency. Centred around entrepreneurs and entrepreneurship. Investments in companies mainly in developing countries in development relevant sectors such as finance, energy, agriculture, health, education, housing. Initially driven by International Finance Institutions (IFIs) with the aim to promote private sector investments. Hardly any relevance outside the US. Exists for many decades. First examples mainly in the UK. New trend. Unclear mix between for-profit and not-forprofit. Newer trend. So far rather anecdotal. Decades of IFI investments have created an emerging investment environment responsAbility Investments AG www.responsAbility.com Changing gears to D Page 4
  • The four Impact Investment segments Mix of social and developmental objectives Community Development Finance Social Impact Bonds Social Entrepreneurship & Venture Philanthropy Development Investments Regulation driven (Community Reinvestment Act CRA of 1977) activities mainly by US financial intermediaries. Access to finance, low income housing etc. in the US. Forced activity. Pay-for-success schemes. Governments outsource public responsibilities to private sector. Attraction of private sector money through bond-like structures. Provision of various types of capital to companies with a social mission. Use of Venture Capital rigor with NGO or philanthropic activities to increase efficiency. Centred around entrepreneurs and entrepreneurship. Investments in companies mainly in developing countries in development relevant sectors such as finance, energy, agriculture, health, education, housing. Initially driven by International Finance Institutions (IFIs) with the aim to promote private sector investments. Hardly any relevance outside the US. Exists for many decades. First examples mainly in the UK. New trend. Unclear mix between for-profit and not-forprofit. Newer trend. So far rather anecdotal. Decades of IFI investments have created an emerging investment environment S responsAbility Investments AG www.responsAbility.com S Changing gears to D S D D Page 5
  • Development Investments Investing in development and in growth  Developing sectors and markets  Investments in new companies  Promoting better goods and services for low-income people  Increasing the positive impacts of relevant sectors vs. reducing the negative impacts of business activities responsAbility Investments AG www.responsAbility.com Changing gears to D Page 6