Research published by the Global Impact Investment Network (“GIIN”) this month reveals a positive link between financial and impact indicators in agricultural impact investments. Moreover, the report shows active investor engagement proves crucial in enhancing financial and impact performance of investee companies.
The new report delves into the intricate relationship between financial and impact indicators within the realm of agricultural impact investments in Sub-Saharan Africa, Latin America and the Caribbean across seed/start up, venture, and mature companies. The comprehensive analysis highlights a compelling correlation: as investee company revenue flourishes, so do the incomes of farmers involved, while also expanding the reach of responsible products and services to a greater number of individuals. Specifically, the report showed that a 10% increase in the investee company revenue resulted in a 4.9% increase in farmer income and a 1.7% increase in the number of famers served.
Investors who actively collaborate with their portfolio improve both their financial and impact performance. Investor engagement with investees improves the relationship between investee growth and farmer income growth by 60%. By engaging in strategic partnerships and offering guidance, investors become catalysts for positive change. This hands-on approach emerges as a critical factor in driving the parallel advancement of financial viability and social progress within the agricultural sector.
Furthermore, the report emphasizes the power of impact data in guiding investments that help to address pressing global challenges more effectively. By openly sharing impact data, investors gain valuable insights that illuminate opportunities and provide a robust understanding of the real-world implications of their financial choices. This newfound clarity empowers investors to drive tangible change and make informed decisions that align with their desired social and financial outcomes.
The study’s authors stress the significance of these insights, as they pave the way for a more conscious and impactful approach to investment. By recognizing the inherent link between financial gains and social progress, investors can use their influence to foster sustainable development, alleviate poverty, and confront other pressing global issues.
The report was produced with the financial support of EQT Foundation, Sorenson Impact Foundation, Temasek, and Visa Foundation.
For a link to the study, please visit here.