The first day of the 2019 GCV Symposium closed with founder and editor-in-chief James Mawson welcoming Amanda Feldman and Charmian Love, co-founders of consulting firm Heliotropy, onstage to announce the launch of Mawsonia’s newest publication, Global Impact Venturing (GIV).
GIV will focus on impact investments, which target companies that can produce a positive change in the world, in areas such as education or finance in developing nations.
Feldman suggested that GIV could help provide corporate investors with impetus to support the achievement of the United Nation’s Sustainable Development Goals by 2030.
Mawson thanked USAid, the US government’s foreign aid agency, for sponsoring a gathering of impact investors at the GCVI Summit in Monterey, California, in January 2019. He agreed with Feldman’s call to achieve more transparency on impact investments undertaken by all types of investors adding: “It is about all of us coming together”.
Feldman had earlier joined Ademidun Edosomwan, managing director of emerging markets for petroleum supplier Total’s investment arm, Total Energy Ventures, as well as Allie Burns from Village Capital and Martijn de Wever, CEO of financial software provider Floww and VC firm Form Over Mass, to discuss impact investment trends.
Burns explained that venture capital firm Village Capital exists to address the three P’s – people, place and problems – that are not adequately addressed by typical VC investing. It has been working with payment processor PayPal to address financial inclusion, leading to the corporate’s first blockchain investment.
Asked about the assumption that impact investing is concessionary capital that involves losing money, Edosomwan, who set up Total’s energy access fund, said assuming that profit and impact cannot coexist is a false dichotomy.
De Wever pointed out the need for transparency, which would lead to trust that would benefit impact investing as an asset class. His startup, Floww, aims to help that process along.
But why invest in impact related endeavours now?
Edosomwan pointed to self-reflection: investors know that business cannot go on as usual, and those that are less self reflective are being held to account by their shareholders. Doing business effectively now means doing good and doing it well. Consumers are actively concerned and where consumers are, corporates follow. It is a no brainer.
De Wever added: “we all have a responsibility not to blow up the planet,” but getting everyone in the same frame of mind is tricky. There needs to be a cohesive strategy for all actors, not just solo investors. A broader visualisation of issues would help money flow to the right places.
External pressures, a developing consensus and the clear business case of addressing underserved communities and needs mean that impact investing is not having to justify its existence as regularly these days.
The VC community has done remarkable things according to Burns, but it has developed “bad habits,” and he urged corporate venture capital (CVC) units to think more broadly, and for their parent companies to support them beyond the typical lifecycle of a CVC unit.
The panellists agreed that the greater the number of CVC units involved the better, and beyond that the more actors involved the better, whether they are governments, consultancies or more corporate investors.
Charmian Love moderated a session on what corporate impact investment looks like, saying that while business has traditionally been about maximising profit and the financial imperative of what people do, its more interesting side is the strategic imperative.
Until now the focus has also been on developing sophisticated financial metrics without great metrics for people or the planet in place. Love told attendees that by working together, corporates can improve profits while also making the world a better place.
Clara Shen, who is involved in business development and ventures for confectioner Mars Wrigley Confectionery China, said: “Managers really perform on what you measure them by, so we have seen extraordinary financial performance. As a result, the resources for people and the planet have been underfunded and capital has been scarce.”
Shen said the company’s better partnerships have involved relatively minor financial transactions but focused on a shared goal Andy Dewis, vice-president of international solutions, energy and sustainability services at energy management and automation system producer Schneider Electric, agreed.
“We see a successful partnership is one where you can enable a load of people to get around a common purpose,” he said. “When you can have a common mission or purpose and build a commercial around it, that makes for a beautiful partnership.”
Mars has began assessing human capital and social capital metrics, and while there is financial value attached to that, it does not automatically put financial value first. Schneider Electric is also in the process of getting its core business to adopt what Dewis called a change focus in metrics, as well as creating businesses that operate on slightly different metrics.
Original reporting by Thierry Heles, Robin Brinkworth and Jack Hammond.
