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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 debate on ESG and Impact Investing trends, private equity, portfolio strategy, food production, emerging markets, sustainable energy or philanthropy investing.
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responsAbility Investments AGwww.responsAbility.com
TBLI Conference ZurichNovember 2013
Klaus Tischhauser
Changing gears to D:
Adding «development» to the ESG-framework
Impact Investing – Trends and Developments
Changing gears to DresponsAbility Investments AGwww.responsAbility.com
Impact Investments and SRI/ESG
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?
Some key observations
Page 2
responsAbility Investments AGwww.responsAbility.com
Impact Investments and SRI/ESG
EFFAS Definition of ESG KPIs:
1) Energy efficiency;
2) Greenhouse gas (GHG) emissions;
3) Staff turnover;
4) Training & qualification;
5) Maturity of workforce;
6) Absenteeism rate;
7) Litigation risks;
8) Corruption;
9) Revenues from new products.
Purpose, scope, objectives
Page 3Changing gears to D
Optimize existing activities of existing companies
Reduce/avoid negative impacts, externalities
Lower risk
Link to developing countries through local production and anti-corruption aspects
How about Impact Investments?
responsAbility Investments AGwww.responsAbility.com
The four Impact Investment segmentsMix of social and developmental objectives
Page 4Changing gears to D
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-for-profit. Newer trend. So far rather anecdotal.
Decades of IFI investments have created an emerging investment environment
responsAbility Investments AGwww.responsAbility.com
The four Impact Investment segmentsMix of social and developmental objectives
Page 5Changing gears to D
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-for-profit. Newer trend. So far rather anecdotal.
Decades of IFI investments have created an emerging investment environment
S S S DD
Changing gears to DresponsAbility Investments AGwww.responsAbility.com
Development InvestmentsInvesting in development and in growth
Page 6
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
