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Impact Investing – Shaping the Future of Finance or Passing Trend?

As the sunset over a green Bristol skyline last Thursday, a group of guests from professional services organisations gathered at our Bristol HQ for a thought-provoking evening of presentations, conversations and networking on the subject of impact investing. The event coincided with Good Money Week – raising awareness of sustainable, responsible and ethical finance, to help people make good money choices.

Guests heard from a range of speakers about the growth in the market for impact investments, along with the challenges and opportunities for different stakeholders. The notion that citizens, companies and investors are no longer waiting for governments to take the lead in our transition to a fairer society that works within our planetary boundaries is why we’re now seeing the growth in the sector. Meanwhile the approach is being challenged as being at the expense of healthy financial returns. Examples are increasingly being seen that those companies demonstrating best practice in social environmental and governance responsibilities, along with progressive thinking, are out-performing their conventional counterparts.

Bevis Watts, MD of Triodos Bank UK, opened the evening highlighting that “demographic changes, social media and awareness of the challenges facing our planet mean that investors are waking up to the fact that there really is no such thing as a neutral investment. Every investment has an impact on individuals, society and the economy.”

Guests first heard from Whitni Thomas who is a Triodos Investor Relations Manager working on in our Corporate Finance team. Whitni talked about how through corporate finance activities, working with organisations to raise capital through bonds or equity offers where they positive social and environmental impact – but making that means of investing easily accessible to the growing population of investor seeking such opportunities is the reasoning behind the launch of the Triodos crowdfunding website earlier this year.

Whitni then introduced Adam Robbins who is a Senior Investor Relationship Manager with Triodos Investment Management, a wholly-owned subsidiary of Triodos Bank. Adam outlined Triodos’ approach to impact investing and how through our Social Responsible Investment strategy we are addressing the many challenges our world faces and how a radical transformation is required. It’s Triodos’ belief that when listed companies direct their influence and resources toward sustainable transition, we can collectively achieve impact at scale and at a pace needed to “move the needle.” Adam gave a brief overview of how the two Triodos Socially Responsible Investment (SRI) funds offered to UK investors work. (Read more from Adam and about our SRI Funds here.)

Julia Dreblow, the first guest speaker then addressed guests. Julia is Founder of SRI Services and FundEcoMarket.co.uk and shared her extensive knowledge and expertise of impact investing. Almost forensically, we heard how the market is growing and changing, and how the standards behind the products and the terminology are vital to ensure credibility. “Look under the bonnet at the different terms used” said Julia. And “Everyone should be doing ESG” – referring to environment, social and corporate governance, which are the three central factors in measuring sustainability. Julia continued by highlighting that one of the key challenges the sector faces is that while everyone should be delivering ESG, it’s the measurement of it where greater focus is needed. Investors want openness and transparency and to understand what it is they’re buying.

The evening’s second guest speaker was Lisa Stanley who is Founder Director at Good With Money. Lisa debunked the myth of impact investing being a passing trend, citing not only growth of the market but also that consumers are demanding such investment opportunities and are “…crying out for more clarity and more information.” She cited the recent Triodos research highlighting that more investors wanting their money to contribute to positive change but that 73% of them say that they’ve never been offered such opportunities. Lisa shared insights from Good With Money’s own research in 2016 that 63% of UK consumers wanted a label to identify ethical or sustainable financial products and that 60% of them believe investments can make high returns without sacrificing responsibility.

Good With Money have their own Good Egg accreditation which is designed to make it easier for people to find financial providers that use finance to benefit people and planet, as well as offering a good deal for their pockets. Triodos (holders of the Good Egg accreditation) believe it’s an important step in providing guidance for people aiming to align their money with their values – it helps to identify the genuinely ethical options in the market.

To wrap up the evening there was good debate among guests and speakers around a variety of topics, all with a general focus on solutions to find ways to help ‘move the needle further’ – help shape and build the future of impact investments. For example, “Can big data help to measure impact?”. “It’s important to look beyond data and look closely at the mission of specific funds.” “Labelling and greater recognition of impact investments generally is what we need”. “Greater transparency is absolutely core and necessary”.

We would like to thank our external speakers and guests for attending the event, and Square Food Foundation, a Bristol based social enterprise for providing the catering.

You can read more about impact investments in the following recent news articles:

A guide to good money: How to invest ethically and sustainably (City A.M.)

Ethical investing: how you can do a power of good (The Guardian)

Impact Investing (Media Planet, Global Cause)

Is ethical investment only for millennials and hipsters? (The Spectator)

Turning your money green (Express)

Saving for the greater good, not the rates (The Telegraph)

Do the right thing and still make money (The Times)

 

Find out more about Triodos Bank Socially Responsible Investment Funds

With Socially Responsible Investment Funds, capital is at risk and the value of an investment can fall as well as rise, income is variable and not guaranteed, and individuals may get back less than invested.

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