Every week at ID, we read a lot about what we do and what we like. This week we read a lot about impact investing – the growth and challenges in the industry and the path to matching investors and social entrepreneurs.
A Common Language for Impacting Investing. An Open Letter to The Honorable Mary L. Shapiro, SEC Chairman – Request for Action: SEC Recognition and Adoption of IRIS
MBA students at Presidio Graduate School published an open letter to the Honorable Mary L. Shapiro, the Chairperson of the Securities and Exchange Commission. The students write to advocate the SEC’s adoption of IRIS, The Impact Reporting and Investment Standards. The IRIS is a tool for impact investors that aggregates data and creates “benchmarks across sectors, regions, or specific metrics.” The tool will provide “a common language to describe social and environmental performance” that can be measured across portfolios.
The Impact Investing Wave by Cathy Clark
After attending the recent Skoll World Forum on Social Entrepreneurship, Cathy Clark writes about the necessity of for-profit social enterprise, and the funding challenges that accompany them. Although impact investing “has arrived in full force,” many for-profit social entrepreneurs struggle to find impact investors. Additionally, impact investors have different expectations of their investments, creating a gap between “impact-first” and “financial-first” investors. One way to close the gap is to be clear about expectations as either an investor or an entrepreneur. Here at ID, we focus on high-tech startups in mobile technology and alternative energy. This narrow focus coupled with our aim to invest in ventures that meet our criteria as a seed-stage, for-profit venture that offers affordable solutions to energy needs or mobile technology in emerging markets. By being clear about expectations, investors and entrepreneurs can team up to create real change and ultimately close the gap.
Speaker Spotlight: Femi Akinde, SlimTrader by Megan McFadden of SOCAP Europe
As impact investors, we’re very proud when our portfolio companies receive the recognition they deserve. Femi Akinde is the CEO and founder of one of our portfolio companies, SlimTrader. SOCAP Europe published a spotlight feature on Femi. A true social entrepreneur, this feature gives Femi the opportunity to discuss his social venture in mobile money and explain why and how it helps people. SOCAP‘s conferences bring impact investors and entrepreneurs together: ID founder, Miguel, discovered SlimTrader at SOCAP10 during a Mobile Fast Pitch. Conferences like SOCAP Europe, SOCAP10, and SOCAP11, will help close the gap mentioned in the previous article. SOCAP Europe is in Amsterdam, The Netherlands on May 30, May 31, and June 1 this year.
As social banking and impact investing becomes professionalized, Weber is confident that the industry has a bright future. This is evidenced by the appearance of new research avenues, books, degrees, and organizations like the Global Alliance for Banking on Values. In fact, the 2008 global financial crisis helped the industry, with social banks reporting a 40% increase in assets per year for the past few years. People were lining up to use savings to invest in “projects that benefit society and sustainable development” rather than “speculative deals in financial derivates.” While this seems forward-thinking, it’s actually “going back to ‘the roots’ of the banking business” when banks existed to serve the community. By managing their opportunities, challenges, and risks, social bankers and impact investors can continue to grow and create real social change.