New Gen Study Tour – impact investing in Europe

By: Alexandra McGuigan   |   New Generation of Giving member

They key takeaway from the New Gen Study Tour for me would have to be the prevalence of European organisations looking to create a better world through sustainable projects.

We visited some inspirational organisations, such as Big Society Capital, Impact Hub and Bridges Ventures, blazing the path in impact investing. There seems to be a clear shift from charities giving money away, to working with disadvantaged communities to help them to become self-sustaining.

Environment, Sustainability, and Governance (ESG) is a common term in Australia but we are really only just becoming familiar with impact investing. The idea of impact investing is based on solving social issues through investment - creating a better world through profitable ventures. Whilst the impact investing universe is still relatively small, the efforts of European philanthropic firms show that it is growing quickly.

Currently the total universe of investments in Australia sits at $20 billion making it difficult for institutional investors to get access to this section of the market. In order to really make a difference towards a sustainable and better future for all Australians surely we need to find a way that superannuation funds can use some of the $2 trillion to put towards impact investments. Over time we should see the difference between ESG standards and actual impact investing dissipate.

Obviously the above can’t happen at the cost to people’s retirement savings, however if over time we can work out ways to make these social projects highly profitable, imagine the Australia that we could create for tomorrow.

It is pretty hard to argue with a case that meets investor return expectations and is good for society – so what now? We need more impact investment projects and a visionary government to help us create a better world through sustainable projects.

Apr. 16, 2016

Philanthropy Weekly Newsletter

Sign up to our weekly e-newsletter for sector news, expert opinion and resources.

Sign up here