Impact Engine’s 2016 Holiday Reading List

Impact Engine’s 2016 Holiday Reading List
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Last year, Impact Engine published our first annual Impact Investing Holiday Reading List. This year, we are updating it to showcase another year of growth and learnings in the impact investing community. 2016 saw increased institutional focus on impact investing, from Blackrock’s introduction of a sustainable equity ETF and an impact bond fund to Eaton Vance’s acquisition of ESG investment manager Calvert Investments. Our reading list this year highlights a cross section of research and reporting focused on the role of impact investing on an international, national, local, and individual level.

International

In 2015, the UN released the Sustainable Development Goals (SDGs), 17 goals its member countries have prioritized as the most critical to ending poverty, protecting the planet and ensuring that all people enjoy peace and prosperity over the next 15 years. While the goals are broad, the commission also built out 169 specific targets such as: “By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty” and “By 2030, double the agricultural productivity and incomes of small-scale food producers, in particular women, indigenous peoples, family farmers, pastoralists and fishers.” The Global Impact Investment Network has used these SDGs as a call to action, and initiated a campaign for impact investors to align their investments to the SDGs. They have also compiled profiles of investors who are already doing this. The case studies directly address the questions of “Why” and “How” investors are choosing to align with the SDGs and provide a useful template for those looking to do the same.

National

The US Forum for Sustainable and Responsible Investment (US SIF) is a leading voice in the conversation around advancing sustainable, responsible and impact investing across all asset classes. They publish a biennial report on trends in the space, the latest of which came out earlier this month. Among the report’s highlights are the finding that $8.72 trillion is invested taking into account Environmental, Social and Governance (ESG) factors, representing more than one out of every five dollars under professional management in the United States, an increase of 33% since 2014. One of the biggest areas of focus for ESG investors is climate change, a criterion used to manage $1.42 trillion of assets, up 5x from 2014. From these statistics, it is clear that impact investing continues to generate not just interest, but real action.

Local

One of the interesting findings from the SIF report was that although the aggregate assets under management at “community investing” institutions are still relatively small at $122 billion, they have gone up 89% since 2014. Community investing institutions include community development banks, credit unions, loan funds and venture capital funds that have an explicit mission of serving low and moderate income communities and individuals. The interest and commitment to investing locally has certainly ramped up in Chicago, where the MacArthur Foundation, the Calvert Foundation, and the Chicago Community Trust announced Benefit Chicago earlier this year. The collaboration seeks to mobilize $100 million in impact investments for nonprofits and social enterprises in Chicago. As the corresponding white paper suggests, the fund is meant to bridge the gap between impact investment supply and demand in the Chicago region. Its innovative structure enables anyone, whether an individual, business, or institution, to invest through fixed income instruments with maturities ranging from one to 15 years.

Individual

A great aspect of Benefit Chicago is that it enables individuals to invest as little as $20 into their own communities. People often feel that impact investing is out of reach for the ordinary American, and that it requires a net worth in the millions of dollars or more to implement such a strategy. However, an increasing array of products are coming to market that enable people to channel varying amounts of capital into impact investments. Forbes published a piece that outlines options for non-accredited investors ranging from public equity strategies to Donor Advised Funds. And Impact Alpha’s article: “Read this if you’re not a zillionaire” shares the names of mutual funds, robo-adviser platforms, and even cash alternatives that can have impact.

The holidays offer a great time for reflection and resolutions. We hope that you will take some time to think not only about the broader impact investing movement, but also about how your values are reflected in your investment portfolio, and what steps you might take to make positive changes in the new year.

About Impact Engine

Impact Engine is a venture fund that invests financial and human capital in early-stage, for-profit technology businesses improving education, health, economic empowerment, and resource efficiency. Did you like this post? Sign up for our community newsletter and we’ll send you the latest Impact Engine news each month.

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