March 16, 2015
Impact investing has captured the world’s imagination – the tables have turned and we are learning to harness the power of markets to solve social problems. EBAN recognizes and embraces the role its community will play in capturing the enormous potential for true valuecreation.
So what is this ‘impact’ business all about?
Simply put, impact investment aims to generate specific beneficial social or environmental effects alongside financial gain. It is a tool to deploy capital – alongside traditional investing models and philanthropy – to address societal issues.
Who better than entrepreneurs to create these innovative solutions that tackle social end environmental challenges as opportunities (we call them ‘social entrepreneurs)? And who knows better than Business Angels and Seed Capitalists what entrepreneurs need to thrive…?
To paint the bigger picture, we are talking about an estimated 250 funds actively raising capital in a market that the Global Impact Investing Network (GIIN) estimates at $45 billioni… and growing fast.The future driving force of the social impact space will come from us, the private investors, who make seed capital available to the change-makers of today and tomorrow.
Sustainable business models are a no-brainer
Understanding and optimizing the societal impact of our investments is an inevitable step in ensuring maximum return – it’s simply good business sense to focus on sustainability. A new and exciting flow of projects tackling issues like social housing, green/clean technology, education and healthcare with profitable business models are emerging as exciting investment opportunities.
Across Europe, social enterprises are making headlines and luring traditional and social capital alike. In Germany, a ground-breaking model integrates autistic people in software testing positions, outperforming any average IT consultant. In Belgium, a project to bring schooling to street kids drives revenues by coaching CEOs in ‘street smarts’. New attractive investment opportunities are developing through innovative solutions to waste management optimization, energy efficiency, re-integrating ‘outsiders’ into the employment market and caring for the elderly.
The desire to combine investments and social responsibility is hard to resist. There is a broad range of products to meet the demand of a new generation of socially conscious investors (and consumers). As long as such investments produce competitive returns – both financial and social – their popularity will only grow.
So what is EBAN’s role?
So, 2015 is the year for all private investors in the EBAN network to consider allocating some of their investment portfolio to this exciting and emerging asset class. There are several ways to be involved – either directly as equity, debt, crowd funding or indirectly in an advisory capacity.
The EBAN Impact Investing Committee (EIIC) has been launched as a response to the compelling call to action of the entire investment ecosystem. The committee includes among its ranks passionate individuals with a common goal: unlocking social and environmental challenges while generating financial profit. The team endeavours to be ambassadors of Impact Investing within EBAN, developing bridges with other European and global Impact Investing communities and establishing a constant dialogue with policy makers relevant to the impact investing industry.
You will find information on the EIIC objectives and working groups here: http://www.eban.org/research-initiatives/impact-investment-committee/. Please watch for our new LinkedIn page and website.
Join us. And bring in others. Together we can influence the inevitable shift to sustainable investing.
Hedda Pahlson-Moller (OMSINT/TIIME)
EBAN Board Member / President of the EBAN Impact Investing Committee (EIIC)