The ImpactAssets Handbook for Investors

Description

Broad advice and specific guidance on how to become best positioned to engage in impact investing as an asset owner.

In recent years growing numbers of investors have been joining the community interested in not only generating financial returns but also creating positive social and environmental value in the world. “The ImpactAssets Handbook for Investors” offers an introductory overview for those interested in investing their capital in a sustainable, responsible and impactful manner.

The handbook offers insights and approaches to developing strategy as well as an understanding of the issues and considerations of impact investors in practice. In addition to discussions of portfolio structure and strategy, the handbook offers an overview of due diligence necessary to assess potential investments, a discussion of communications and performance measurement issues and other factors key to managing capital for multiple returns.

With contributions from some of the field’s leading experts in impact investing, “The ImpactAssets Handbook for Investors” will provide the reader with both broad advice and specific guidance on how to become best positioned to engage in impact investing as an asset owner, both large and small. While not an “answer book,” the handbook offers practical insights and presents critical questions every investor should consider in creating an investment strategy and executing the deployment of investment capital.

List of Contributors; Introduction, Jed Emerson; 1. Construction of an Impact Portfolio: Total Portfolio Management for Multiple Returns, Jed Emerson and Lindsay Smalling; 2. Total Portfolio Management: One Practitioner’s Approach, Matthew Weatherley-White; Case Study 1; 3. Seed Stage Investing: High Impact, But Not for the Faint of Heart, Tim Freundlich, Jed Emerson and Lindsay Smalling; 4. Choosing Your Impact Investment Advisor, Brad Harrison and Stephanie Cohn- Rupp; Case Study 2; 5. Targeted Impact: Donor- Advised Funds and Impact Investing, Jointly authored by senior staff of ImpactAssets, RSF Social Finance and Tides Network; 6. Transformational Giving: Philanthropy as an Investment in Change, Kris Putnam-Walkerly; 7. Assessing Your Opportunities: The Challenge and Key Practices of Engaging in Investor Due Diligence, Sandra Osborne; Case Study 3; 8. The Measurement Challenge, Sara Olsen; 9. Communicating Impact: Frameworks for Messaging, Amy Hartzler; 10. A Journey to Impact: Initial Steps toward Impact Investing, Jennifer Kenning; Case Study 4; 11. Getting to Impact, Jed Emerson; 12. Concluding Thoughts on Mobilizing for Impact, Jed Emerson and Tim Freundlich; Appendix: Impact Investing Resources; Notes on Contributors; Index.

Sujets

• Economic development
• Economic growth
• Economics
• Business ethics
• Development

Informations

• Publié par: Anthem Press
• Date de parution: 03 octobre 2017
• Nombre de lectures: 0
• EAN13: 9781783087310
• Langue: English

Extrait

The ImpactAssets Handbook for Investors
The ImpactAssets Handbook for Investors
Generating Social and Environmental Value through Capital Investing
Edited by
Jed Emerson
Anthem Press
An imprint of Wimbledon Publishing Company
www.anthempress.com

This edition first published in UK and USA 2019
by ANTHEM PRESS
75–76 Blackfriars Road, London SE1 8HA, UK
or PO Box 9779, London SW19 7ZG, UK
and
244 Madison Ave #116, New York, NY 10016, USA

First published in the UK and USA by Anthem Press 2017

© 2019 Jed Emerson editorial matter and selection; individual chapters © individual contributors

The moral right of the authors has been asserted.

All rights reserved. Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the above publisher of this book.

British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library.

ISBN-13: 978-1-78308-861-4 (Pbk)
ISBN-10: 1-78308-861-3 (Pbk)

This title is also available as an e-book.
We would like to dedicate this book to all those social entrepreneurs and impact investors around the world who have spent their lives creating the knowledge and experience we each now build upon.
While many entering the field of impact investing mistakenly believe it to be new or untested, in truth there are many who have paved the path upon which those coming to the practice now walk.
We thank you for your good efforts, for taking early risks to pioneer best practices in impact investing and for teaching us there is more to investing capital well than simply making money.
Contents
List of Contributors
Preface
Introduction
Jed Emerson
1 Construction of an Impact Portfolio: Total Portfolio Management for Multiple Returns
Jed Emerson and Lindsay Smalling
2 Total Portfolio Management: One Practitioner’s Approach
Matthew Weatherly-White
Case Study 1
3 Seed Stage Investing: High Impact, But Not for the Faint of Heart
Tim Freundlich, Jed Emerson and Lindsay Smalling
4 Choosing Your Impact Investment Advisor
Brad Harrison and Stephanie Cohn-Rupp
Case Study 2
5 Targeted Impact: Donor-Advised Funds and Impact Investing
Jointly authored by senior staff of ImpactAssets, RSF Social Finance and Tides Network
6 Transformational Giving: Philanthropy as an Investment in Change
Kris Putnam-Walkerly
7 Assessing Your Opportunities: The Challenge and Key Practices of Engaging in Investor Due Diligence
Sandra Osborne
Case Study 3
8 The Measurement Challenge
Sara Olsen
9 Communicating Impact: Frameworks for Messaging
Amy Hartzler
10 A Journey to Impact: Initial Steps toward Impact Investing
Jennifer Kenning
Case Study 4
11 Getting to Impact
Jed Emerson
12 Concluding Thoughts on Mobilizing for Impact
Jed Emerson and Tim Freundlich
Appendix: Impact Investing Resources
Notes on Contributors
Index
Contributors

Jed Emerson
Senior Fellow, ImpactAssets
Edition Editor
Tim Freundlich
President, ImpactAssets
Brad Harrison
Managing Director, Tiedemann Advisors
Amy Hartzler
Founder, Do Good Better
Jennifer Kenning
Co-founder, Align
Sara Olsen
Founder, SVT Group
Sandra Osborne
Investments Director, ImpactAssets
Kris Putnam-Walkerly
Founder, Putnam Consulting Group
Stephanie Cohn-Rupp
Investments Director, ImpactAssets
Lindsay Smalling
Producer Curator, SOCAP
Matthew Weatherly-White
Partner, The CAPROCK Group
Preface
A handbook is a tool, like an implement with which to dig into the dirt, a hoe with a rough-hewn handle one uses to work the soil, to remove the rocks and to till the ground, breaking up clods of earth, moving it into rows, and opening up new areas for seed and eventual, future growth.
A handbook may also serve as a compass, offering readers an orientation toward the North and helping position themselves in alignment with the forests, mountains and rivers to be entered, crossed and summited. But a handbook is neither a bible nor a book of wisdom to be reflected upon as much as a set of guidelines and guidance for the traveler. 1
Progress on the Fundamentals
In the brief two years since the publication of the first edition of The ImpactAssets Handbook for Investors , little has changed in the field of impact investing and everything has changed. The field continues to grow, newcomers continue to launch new products, funds and investment firms, and capital continues to flow into the field, seeking impact—but also seeking financial returns and diversified approaches to placing capital in pursuit of doing well while doing good. These newcomers bring fresh energy and new passions, just as they bring a lack of awareness of the past or sense of progress made to date. Indeed, many of the issues and themes impact investors were debating three years ago when we first began assembling this volume continue to be explored, with progress being made on a number of important fronts.
The Global Impact Investing Network (known as the “GIIN”) has now published its four Characteristics of Impact Investing. 2 These include the ideas that impact investors:

• Intentionally contribute to positive social and environmental impact.
• Use evidence and impact data in investment design.
• Manage impact performance.
• Contribute to the growth of impact investing.
These characteristics are important because they assert a fundamental set of concepts behind which all impact investors should gather, promote and hold themselves accountable. Furthermore, they are central concepts that those seeking impact investment opportunities may use to engage with firms, funds and investment instruments by asking,

Does this investment intentionally contribute positive social and environmental impact? If so, how exactly is that impact achieved?
Is evidence and impact data being used to create the investment vehicle?
Are the managers of capital attempting to oversee and govern the practices of the investment in order to optimize impact performance?
And how does this firm contribute broadly to the growth of the field I would like to place my capital within?
These are simple ideas, and yet those seeking to engage in impact investing must answer these important questions if they are to stay on track, identifying investments that offer more than simple financial returns alone.
The tricky part, of course, is that in many ways, there is not a single clear-cut answer to these questions; correct responses may well differ based on the asset class, type of strategy and capacities of the investment under consideration. If those claiming to march under the banner of impact are not able to thoughtfully and with depth respond to these questions, potential investors should be wary and consider whether the proposed investment is actually worth entrusting capital to.
In addition to the continuing good work of the GIIN, the World Bank’s International Finance Corporation, known as the IFC, recently released its own set of guidelines, called the Operating Principles for Impact Management. 3 These include the following:

1. Define strategic impact objective(s), consistent with the investment strategy.
2. Manage strategic impact on a portfolio basis.
3. Establish the manager’s contribution to the achievement of impact.
4. Assess the expected impact of each investment, based on a systematic approach.
5. Assess, address, monitor and manage potential negative impacts of each investment.
6. Monitor the progress of each investment in achieving impact against expectations and respond appropriately.
7. Conduct exits considering the effect on sustained impact.
8. Review, document and improve decisions and processes based on the achievement of impact and lessons learned.
9. Publicly disclose alignment with the principles and provide regular independent verification of the alignment.
We’re pleased to say that the first and second chapters of this volume explore principle number two in depth, presenting the overall strategy of constructing an impact portfolio as well as reflections from a leading impact investor regarding considerations in doing so. Other chapters in this volume explore issues of due diligence, monitoring and metrics.
The IFC impact investing principles are important in that firms are now being asked to commit themselves to operating within the impact investing marketplace in accordance to these principles. But, again, while the principles were launched with some fanfare and the endorsement of a number of leading, mainstream investment firms, the process of promoting and then adhering to these principles is not as simple as a firm’s signing a piece of paper and committing to put the principles into practice. One must ask, among a variety of related question, How do they apply these principles in practice? How easy is it for potential investors to assess their advancement of these principles? These principles and the GIIN’s core characteristics are important in that they offer guidelines to institutions seeking to offer impact investing products to the fiel