Oil major BP under its new CEO talks about being net carbon neutral by 2050; major US corporations at its Business Roundtable talk about stakeholder capitalism rather than just chasing profits for shareholders. The whole of the cognoscenti at the World Economic Forum last month seemed to converge on stakeholders as the new meme.
And investors are climbing aboard.
John McIntyre, social impact investment director at American Family Insurance, which runs the Institute for Corporate and Social Impact, writes in to say: “We have just completed our first year of the AmFam Institute with eight investments for social impact, many of which you can see here: https://www.amfaminstitute.com/impact-investments/. We posting a new job for a portfolio manager.”
KKR, a New York-based global investment firm, raised $1.3bn for its KKR Global Impact Fund SCSp this week.
But for those grappling with where impact or SDGs might sit as an investment strategy there are some starting points.
First, do the usual types of deals from a financial and/or strategic basis then overlay an SDG or impact lens to see if they qualify. When GCV worked with the UN thanks to Amanda Feldman and Charmian Love’s help a few years back a perhaps-surprising number were relevant (Elizabeth Boggs-Davidson from the UN will be back to speak at the GCV Symposium in June to update on its new enterprise SDGs).
Training and awareness can increase this goal (similar to when Intel moved from a female-focused fund to making all its team consider the diversity and inclusion issue).
Second, other groups set up a specific fund or amount – Nestle, Citi, Microsoft all did this in January. It’s a way of signalling to the community and driving focus internally to usually the same people but often requires a point person or more and specific training or interest.
Third, incorporate a wider environmental, social and governance (ESG)/corporate social responsibility (CSR) approach taken by the broader company and/or its philanthropic body, eg Google.org.
Impact investing or use of SDGs to consider investing normally requires considering the deal to make it financial returns as well as positively impact society/environment, etc. It is explicitly not to be a charitable donation. This latter approach to effectively give money away to encourage change is philanthropy and can often be done in conjunction with impact investing.
There’s lots of good CVC examples to consider – Patagonia, Salesforce, Samsung and our Global Impact Venturing (GIV) title has more as one future of venture.
