How we can do it (together): Breaking the impact investing space open - Slides

Developingtalent•Growingventures•Openingmarkets
Visit us at marsdd.com
Agenda
Topic Time Lead
Introduction & Logistics (lunch) 12:00 – 12:15 Sara / Tim
Context setting 12:15 – 12:30 Jordan
Pathway to a much bigger market 12:30 – 1:10 Bill
Break 1:10 – 1:25 All
A liquid (or more liquid) impact
fund
1:25 – 2:05 Sucheta
Community investing and FIs 2:05 – 2:45 Andrea
Sum up / Next steps 2:45 – 3:00 Jordan /
Sara

Social Finance
Discussion
Context
May 7, 2015

1/2. Bloombergs’ Snapshot of the Canadian Charity Sector 2012 2. 2012 figure
$223B1
$3.5T2
Charitable
sector
Capital
markets
Access to even a small portion of capital markets
represents a large opportunity to address social
issues

Responsible
Investment
Responsible investment (RI) is the
integration of environmental, social
and governance factors (ESG) into
the selection and management of
investments.1
Two important streams of investing
with purpose
Impact Investment
Impact investing (or social finance) is
an investment approach with the
explicit intention of solving social or
environmental challenges and
generating financial returns. This
includes investments producing a
return of principal to offering market-
rate or even market-beating financial
returns.2
Must include:
1.Investor intention
2.Investee intention
3.Impact measurement
1. Responsible Investment Association 2. Modified from State of the Nation: Impact Investing in Canada

Responsible
Investment
•Negative screening
•Positive screening
•Shareholder engagement
– E.g., Say on pay
Multiple examples exist within each
stream
Impact Investment
•Impact fund investment
•Green bonds
•Community bonds
•Direct (social enterprise / social
venture) investing
– Debt, Equity, Revenue-based
•Crowdfunding
•Social Impact Bonds (SIBs)

• Assets under management by UNPRI signatories now stands at
more than $45 trillion with 1,300 signatories
– Up from $4 trillion at the PRI’s launch in 20061
• A 2014 survey of 124 global impact investors showed that they
managed $46B up from $10.6B deployed in 20132
• More than $51-billion (U.S.) in green bonds outstanding3
• Intergenerational wealth transfer, estimated at USD $41 trillion
by 2050 with nearly USD $6 trillion of that expected to be
directed towards social issues4
• Driving social impact is important to 92% of High Net Worth
Individuals5
Where we are today globally
1. (UNPRI 2015) 2. Spotlight on the Market: The Impact Investor Survey 3. Climate Bonds Initiative (2014) 4. The Promise of Impact Investing, Harvard Business
School, 2011 5. World Wealth Report 2014

• Canadian responsible investment (RI) market sized at ~$1T1
– 31% of Canadian investment industry
– 68% increase compared to two years earlier
• Green bond market grew from $0 to $1.2B in 2014
• Impact Investing market size estimated at $2.2B in 20122
• 92% of Canadians say that it's important to choose
investments that are aligned with their values3
• 60% of investment industry expects moderate or high levels
of RI growth over the next two years3
Where we are today in Canada
1. 2015 Canadian RI Trends Report 2. MaRS State of the Nation report 2013 – supply-side estimate (excluding pension funds and HNW individuals) 3. NEI
Investments, 2014 4. CRA, 2013

Canadian Impact Investing market size
expected to get to $3.2B by 2017
Baseline size of Canada’s impact investment market estimated at $2.2B in 2012
Source: MaRS State of the Nation report 2013 – supply-side estimate (excluding pension funds and HNW individuals)
Estimated Canadian Annual
Impact Investment (2017
range)
Estimated Canadian Impact
Investment AUM (2017
range)
10% of Canadian private and public foundations
assets represents a $5.6B4
opportunity

Key players

Visit us at marsdd.com January 2015
developed a “Solar Bond” as an impact
investment product available to retail investors in Ontario allowing
them to align their social and environmental goals with their financial
objectives.
based in Ottawa, has made investments in Ontario
non--‐profits, including a First Nations housing project.
Many interesting examples exist
an organisations dedicated to making a positive social
impact, started an issuing platform for charities to raise between £10
and £50 million of unsecured loan finance through bond listings on the
London Stock Exchange.
manages $300M in private equity investments in
emerging markets. They deliver top-quartile returns by investing
capital in private equity funds and companies that benefit local
communities and the environment.

Visit us at marsdd.com January 2015
Precedent of foundations and investment
managers working together exists
Green Beta strategy Foundation investment Additional products
• Developed carbon
efficiency investment
strategy
• Underweights companies
with higher carbon
intensity, but maintains
exposure to sectors by
overweighting companies
taking more proactive
approaches to reducing
carbon emissions
• Showing positive results
• $100 million of funding
from McKnight
Foundation
• Part of $300 commitment
toward impact investing
to support the transition
to a low-carbon
State Street
•SPDR MSCI ACWI Low
Carbon ETF (LOWC)
•Include companies with
low carbon emissions
relative to sales and market
cap.
Blackrock
•MSCI ACWI Low Carbon
Target ETF
•81% less carbon
emissions1
1. Relative to the All Country World Index
Balance between fiduciary
duty and decarbonized
portfolio
Foundation commitment
provided incentive to
produce new product
Led to other market
leaders developing similar
products and growing
overall market

• Lack of capacity (and resources) to dedicate to mission
investing
• Lack of investment opportunities with tight mission
alignment
• Focus on creating impact only in their community
• Investment committees and wealth advisors have limited
interest and/or capability
• Regulatory barriers (e.g., LP regulation)
• Impact measurement a challenge
Key challenges - Foundations

• Lack of investable options
• Demand for impact products unclear
• Investment risk (mainly due to quality of investments)
• Lack of liquidity with many impact options
• More complicated / onerous to execute
Key challenges – Wealth
advisory / Asset managers

End of session

Date: September 28th
to October 2nd
, 2015
Location: Toronto, ON
Objectives:
•Develop your ability to drive social impact and financial returns
•Provide and overview of responsible, sustainable, and impact investing
opportunities as well as understanding of where the field is going
•Support you to gain practical skills and knowledge in an important and emerging
sector
•Network and learn from expert faculty and selected participants, and become a
part of growing global community of professionals in the field of social finance
Instructors
•Dr. Tina Dacin, Ph.D | Director, Centre for Social Impact | Queen’s School of
Business
•Joanna Reynolds, M.Ed | Associate Director, MaRS Centre for Impact Investing
If interested, contact Joanna at jreynolds@marsdd.com
Social Impact Academy

ImpactOntario
MAY 25th, 2015
Impactontario2015.event
brite.ca
Promo code: “CFC” for 10%
off

How we can do it (together): Breaking the impact investing space open - Slides

Recommended

Recommended

More Related Content

More from Community Foundations of Canada

More from Community Foundations of Canada (12)

Recently uploaded

Recently uploaded (20)

How we can do it (together): Breaking the impact investing space open - Slides

Editor's Notes