The pandemic drove a major dislocation of the global economy. Many people were forced out of work, and they tended to be the workers who could least afford it. There were follow-on effects to supply chains and financial stability, and the after-shocks are likely to continue for some time.
In 2022, it’s time to rebuild, and the Global Impact Investment Network (GIIN) is as committed as ever to building capacity in this global community of investors.
OnImpact spoke with the founder and CEO of the GIIN, Amit Bouri, about the GIIN’s pandemic recovery work, and the new initiatives we can expect this year.
Amit will be speaking at the 2022 Impact Summit at the end of March, and he offered a prelude to his presentation.
Impact Investing Is More Important Than Ever
Amid the pandemic, the impact investment sector proved how important it is for capital to be available and directed to address our most pressing social issues. It silenced the doubters who suggested it was a fair-weather trend that wouldn’t survive a down-turn.
The GIIN is a powerful convener of ideas and people, and their global remit puts them in a unique place to lead on policy and advocacy.
“The pandemic underscored the need for impact investing. It put a spotlight on many of the inequities that were already existing in our system, and unfortunately exacerbated them significantly.” Amit says.
“Whether you’re thinking about COVID recovery, or the broader agenda around achievement of the Sustainable Development Goals, it’s going to be absolutely critical to have large scale capital move with the intention of generating positive measurable impact, if we are to achieve those big global goals.”
The model of impact investment, so far, has been limited to the pioneers. But as the challenges grow, the model is now being recognised by broader financial players as being a key piece of the recovery puzzle.
“We’re now seeing a shift in thinking amongst many investors, who have been adopting ESG largely through a lens of financial materiality, but are now seeking to go a step further and understand How can their their capital, play a role in driving the economic recovery and also driving the transition to a sustainable economy going forward.” Amit says.
The GIIN Agenda for 2022
Impact measurement will continue to evolve in 2022. The GIIN is well-known for its development and stewardship of the IRIS+ framework, which defines a set of key metrics to guide impact measurement and management. Plus, they’re preparing to unveil an impact performance benchmark.
“We’re continuing to build out the system of IRIS+, and that includes adding new themes, including: clean energy, racial equity, as well as biodiversity, to the portfolio of strategies and themes that are available to impact investors to the system.” Amit says.
“And next month we’re going to be publishing something really exciting, it’s our first ever impact performance benchmark. And specifically, it’s looking at the area of financial inclusion where we’ve worked with a group of leading impact investors to help us shape and design a benchmark of impact performance in the financial inclusion space.”
It’s a sign of positive growth when so many fund managers are clamoring to use the term ‘impact’ in their product offerings. This of course raises questions about integrity and authenticity, and GIIN’s ‘benchmark’ aims to set a standard to which all investors can compare their progress.
“It’s a prototype, but this will start giving investors a reference point for how to think about their impact performance in light of what’s happening in the broader market. And this is an area that the GIIN will continue to lean into. So we can help drive greater sophistication of how investors incorporate impact performance data into their decision making.” Amit says.
The Bridge Between ESG and Impact
As the impact space grows, it’s driving an expectation of higher standards in all areas of financial services.
ESG is most often discussed in terms of public equities, and its at the other end of the sustainable investing spectrum. It’s an important starting to point to push investors beyond only considering financial factors in their decision-making.
“So ESG is really important, and it means different things to different people. But what’s largely getting traction in the mainstream markets, is looking at ESG through a lens of financial materiality. And that will lead to a lot of improvements in the world. Because to the extent that investors are factoring in things like work or health and safety and more diverse governance and things like climate risk, that will hopefully lead to good progress in the way that the markets operate.” Amit says.
“But if we are going to truly address the climate crisis, and make headway on addressing global inequality, we can’t rely on ESG, and that lens of financial materiality alone. It will also take very intentional efforts to drive positive impact on the whole suite of sectors and themes that are important to impact investors.”
Impact Summit 2022 – Optimism & Action
While the covid pandemic forced a hiatus of the Impact Summit, the event is roaring back in 2022, and Amit Bouri will be beaming in from New York.
“This is an important time, we’re now seeing a groundswell of interest amongst the investors who are talking about their role in investing in a sustainable future.” Amit says.
“This includes all the net zero initiatives, and there’s a lot of discussion from leaders of industry around stakeholder capitalism. But I think this is an important time where we translate those with good intentions into real impact results. And to go from these global aspirations, down to specific investments that make a real difference for people, and really help protect a healthy planet.”
There’s huge momentum going into 2022. The impact space has been growing and evolving, and the pandemic was a crisis that cemented the vital role it’s playing in our economy.
“This is an important opportunity for the impact investing community to really elevate our thinking and our approaches to a much broader global scale, that will really help to move the needle on these big issues that the world is facing.”
The Impact Investment Summit runs from 30th of March to 1st April, at the International Convention Centre, Sydney. Early bird tickets are currently available.