What are Impact Investments?
Impact Investments seek to generate both financial return and social and/or environmental value—while at a minimum returning capital, and, in many cases, offering market-rate returns or better.
What is the Global Impact Investing Network?
The Global Impact Investing Network (GIIN) will be a global group of investors and intermediaries who put capital to work at scale to generate social and/or environmental value as well as financial return. The GIIN will be a platform for leaders of the emerging impact investing industry to promote the activities and institutions that can accelerate its maturation and ultimately drive substantial capital to solve previously intractable social and environmental challenges.
Why do We Need the GIIN?
The past few years have seen the dawning of a new era for impact investing. The idea that investors can actively put capital to work for good beyond financial return has evolved from a fringe movement to an emerging industry with gathering mainstream participants and influence. Investors and entrepreneurs have launched dedicated impact investing banks, raised impact investing funds, made multimillion dollar impact investments and created impact investing units in established institutions.
Despite this momentum, real barriers stand between the promise and the reality for impact investors. In most areas, impact investments are expensive to source and subscale. Their impact is difficult to predict and to measure. Their promoters tend to lack a verifiable investment or business track record. Comparing and benchmarking investments is complicated by confusing terminology. The ecosystem of investment structurers, advisors and intermediators that support profit-maximizing investments and philanthropic endeavors do not yet adequately support impact investors. The weakness of market mechanisms hampers investment.
These barriers are not unique. They are the archetypal challenges that confront pioneers operating in areas that existing systems do not support. They will also not disappear on their own. We know from the success of other innovations –such as the development of the venture capital industry in the last 50 years– that a small group of influential leaders can accelerate the pace and manner in which these barriers fall. We also know from other examples of false starts that these barriers can thwart the most promising innovations. The Global Impact Investing Network will exist to provide global leaders of this new industry a coherent platform for systematically recognizing and addressing these barriers.
Who we Are
The Global Impact Investing Network will bring together impact investors and intermediaries who have the capacity to invest and intervene at scale, making multi-million dollar investments and aggregating funds large enough to access institutional capital.
- We represent the large-scale family offices, institutional investors, pension funds, investment banks, wealth managers, impact investing funds, retail investment aggregators, and private foundations that can steer billions of dollars of capital, support collective action, set standards, and back new businesses and funds that can fill the gaps in the current impact investing ecosystem.
- We make investments that generate both social and/or environmental value and financial returns, at a minimum returning capital and in many cases offering market-rate or even market-beating financial returns. We will support the development of infrastructure for combining capital with different return expectations to enable investments that wouldn’t happen otherwise.
- In contrast to the dominant mode of “socially responsible investment” we actively seek to place capital in businesses and funds that can harness the positive power of private enterprise, rather than focusing on avoiding “bad” investments.
- With diverse geographic focus and institutional affiliations, we seek deals across various sectors, return expectations and asset classes.
- We believe these investments create an impact beyond financial return and will ultimately impact mainstream investment practice.
The GIIN has already engaged many impact investors around the world. We are currently in the process of developing our membership program and will be recruiting formal members in the near future.
Intended Impact of the GIIN
The members of the Global Impact Investing Network will aim to use their skills and assets to improve the social and natural environment we share. We will know we have succeeded when:
- Members consider the GIIN a highly value-adding affiliation that fosters mutually beneficial engagement, builds connections that otherwise would not occur, and provides useful information that facilitates our deepening engagement in impact investing.
- Impact investors place more capital more efficiently to address more social and environmental challenges with a clearer understanding of the impact they deliver.
- The impact investing ecosystem includes the products and institutions that facilitate more efficient capital allocation and deal syndication.
- Impact investing work increasingly draws more mainstream capital into impact investment and refutes prevailing convictions that support binary approaches to social and financial return.
- The planet and its people are healthier and enjoy a more promising future because of the investments we have undertaken and catalyzed and the industry we have built.
Key Activities of the GIIN
- Knowledge sharing: This new industry faces the dual challenge of a dearth of information in some areas and the inconsistent quality of the limited information that is available. The GIIN will generate and disseminate basic knowledge projects (e.g., benchmarking studies, term sheet guidelines, etc.) to address areas where the absence of information is hindering impact investment activity.
- Industry infrastructure development: Members recognize the need to develop elements of a basic public goods infrastructure that can benefit all investors by creating a more efficient marketplace. As an initial activity in this area, prospective GIIN members have prioritized a project to develop standards for assessing the social and environmental impact of investments and portfolios and catalyzing the launch of an independent standards-setting body.
- Publicizing Impact Investments: The GIIN will help raise awareness of the important impact investing activity already underway.
- Financial product development: The GIIN can identify and research new products which will better enable the scaling of the impact investing industry. The inaugural project is the design of an Impact Investing Fund of Funds that could offer investors a different and efficient vehicle by which to put capital to work in impact investments.
- Networking: The range of activity and diversity of leaders in this new industry is as challenging as it is invigorating. Developing effective mechanisms for working together will be crucial to grow the scale