Reflecting on the launch Wednesday of the Impact Investing Policy Collaborative, at the Brazilian Development Bank (BNDES) in Rio, we were struck by just how far impact investing has come — particularly because, at first glance, the notion that private capital might be harnessed to create intentional, targeted social and environmental impacts is relatively threatening (for those who have not always been in the business, like many development and community finance institutions).
Impact investing requires that investors look beyond just financial return, that philanthropic foundations look beyond just grants, that SMEs and even larger corporations develop a capacity for innovation that has sustainability at its core, and that the public sector seriously consider how services can be delivered more effectively and efficiently, even if that means ceding some control.
You would think that entrenched interests might prevail; but quite the opposite is happening.
At BNDES Wednesday, it was clear that the more powerful instinct is to collaborate in order to address urgent challenges like rapid urbanization, growing inequality, uneven development (particularly in rural areas), and environmental degradation.
Panelists shared myriad examples of the work they are doing that is different from the norm. Investors are taking new risks with the expectation that long-term performance, market development, and other learnings will more than compensate for any short-term wrinkles; policymakers are redirecting resources from treatment to prevention; and social enterprises — which are often borne of a singular, uncompromising passion — are making the necessary adjustments to become more investable in the interests of growth.
We will provide video and other content on the IIPC launch shortly, and the related conference that was hosted by PCV together with our partners at the IRI at Harvard, Rockefeller Foundation, and Unitrabalho, in Teresopolis, Brazil, from June 18-19. What is most striking is the shift from ideas to action in just the last 12 months, which suggests that we have reached the next phase of the market’s development.
It is also particularly notable that impact investing is now being embraced, adapted and applied in local markets like Brazil and has moved far beyond its origins, as a unifying principal, in the global north. It was auspicious that this discussion and the celebration of the birth of the Impact Investing Policy Collaborative occurred on the exact 60th anniversary of BNDES’ creation, on June 20, 1952.