A Millennial’s perspective on Impact Investing
I recently co-organized the first Impact Investing Symposium at Washington University in St. Louis’s Olin Business School. The organizing students and I, members of Net Impact, believe ESG (Environmental, Social, and Corporate Governance) and Impact Investments are auguries of the future. Our symposium sought to bring Impact Investing to a more prominent position within Washington University and the greater St. Louis community.
We featured industry leaders from TriLinc Global Impact Fund, pePartners, Cambridge Associates, Breckinridge Capital Advisors, and Ascension Investment Management who discussed both the appeal and merit of ESG and Impact Investments. By inviting such field experts to discuss this $60 billion space, we were able to successfully showcase the certain growth and demand of ESG and Impact Investments.
In my own business, The Women’s Bakery (TWB), a social enterprise that empowers women and builds women-owned businesses in East Africa, I seek to blend the non-profit and for-profit sectors by extracting the best components from each to enhance the efficacy of both. In essence, TWB harnesses business as a tool for positive social change. Through vocational business education, TWB trains women to make and sell highly nutritious breads in their communities, meeting local demand with local supply.
TWB is the nexus of for-profit and non-profit sectors. We use business and comprehensive business training to advance autonomy, improve community nutrition, and generate socio-economic mobility in East Africa.
So, why is this important?
It’s important because TWB, through blended perspectives, mirrors the intent of ESG and Impact Investments. ESG and Impact Investments leverage innovative capital to generate social and environmental impact alongside a financial return. And in so doing, ESG and Impact Investments elevate business’s function in and for society.
By comprehending global economic and social trends, one can accurately anticipate the certain growth of the ESG and Impact Investing fields. I believe ESG and Impact Investments will mainstream and, therefore, demand the attention of financial advisors and business leaders as well as policy influencers.
Everyone wants to buy into something of value and our values are becoming increasingly more robust and less compartmentalized.
Members of the Millennial generation, for example, having grown up under the auspices of Corporate Social Responsibility (CSR), will not only demand, but drive values-based companies in the near- to mid-term. As a result, Millennials will look to integrate a more holistic approach to their investment strategy, aligning their values with their investments. This emerging holistic approach, too, will occur alongside the estimated $30-$41 trillion wealth transfer, and a reported 45 percent of Millennials will seek a social and/or environmental component to their investing. This new generation of investors will look to put their money to work with purpose. Unequivocally, Millennials will be the clients to engage and adequately serve.
Women are an equally formidable force. Women already make up almost half of the world’s millionaires and that number continues to grow. To date, 46 percent of the top wealth holders in the U.S. are women, and at women control at least 63 percent of the wealth in the United States. As the number of wealthy women grows, so too does their role within the investment space, specifically the social, environmental, and political impact of their investments.
This increased demand for value alignment and integration into the traditional investment process will necessitate an adaptable investment strategy, generating for clients the opportunity to leverage their investments to support their long-term social, environmental, and financial goals.
ESG and Impact Investments will eventually mainstream and simply become “investments.” This will mean success—success in ensuring that businesses work for people, that capitalism’s efficiency is enhanced because of conscious decision-making, and that social and environmental returns share equally competitive footing with financial returns.
By helping to illuminate and amplify this perspective, I hope to inspire thought, on-going discussion, and change. I believe that Washington University and the greater St. Louis community are poised to be thought-leaders in the ESG and Impact Investing space. And, they should be. Our robust entrepreneurial ecosystem already lends itself to advancement—and that’s what ESG and Impact Investments are all about: advancing the efficacy of a business and one’s stake in it.
Markey Culver is the founder and director of The Women’s Bakery, Inc., a social enterprise that empowers women and builds women-owned businesses in East Africa. She is an MBA candidate at Washington University’s Olin Business School. For more information, contact Markey at email@example.com or follow The Women’s Bakery on Twitter@WomensBakery.