2020: a super year for impact investing?

Amy Clarke, Founding Partner of Tribe Impact Capital, explains why investors right across the wealth spectrum are moving to make a positive social and environmental difference with their investment capital in ever greater numbers, and what using capital positively can achieve.

As we hurtle into yet another year, this time it could be different. 2020 is widely being seen as the ‘Super Year’ – a year full of hidden promise and momentous potential for both people and the planet. This may seem quite surprising given what has appeared to be on many occasions the growing discord, conflict and chaos that surrounds us.

Around the world, leaders will be working to secure ambitious new green deals for planet and for people, including a proposed new global biodiversity framework; action on climate change at COP26, which will come to Glasgow in November; a treaty for the oceans; and a renewed commitment to the environment under the UN’s Sustainable Development Goals. All of these will be negotiated during the year, making 2020 potentially a stand out in terms of the level of discourse.

How do we respond to the growing environmental and social crises facing us? Can we trust that global leaders will be able to agree and deploy the actions needed given the volume of activity happening this year?

But what does that mean for us, as people? How do we respond to the growing environmental and social crises facing us? Can we trust that global leaders will be able to agree and deploy the actions needed given the volume of activity happening this year?

One thing is clear, change often happens slowly when international political agreement is sought. This doesn’t diminish the power of international agreement, but it can slow down the progress that’s required. Change can, however, be expedited exponentially when the will and the might of the people is exercised. So how big does a minority have to be to affect a transformation? Well, according to research, that number is lower than you might think – 25%. Here, we reach a tipping point when the collective opinions, behaviours and actions influence the remaining 75%.

The power of the 25%

If 25% of us have that amount of power at our disposal then the future can indeed look brighter than it might currently seem! As Margaret Mead, the anthropologist, once famously opined, “Never underestimate the power of a small group of committed people to change the world. In fact, it is the only thing that ever has.”

Let’s think about that change. What is needed? Where do we focus? What do we do? It is increasingly clear that consumer-based capitalism is not working for all the people and certainly not for the planet. Divisions have opened up in societies between the haves and the have nots, and resources have been plundered.

As Margaret Mead, the anthropologist, once famously opined, “Never underestimate the power of a small group of committed people to change the world. In fact, it is the only thing that ever has”

These are behavioural problems. But behaviour is malleable, it can be bent to the will of others, and most importantly, it can also be wrestled back and repurposed. We own our behaviours. The same way we own our belief systems and our values. That being the case, then we can own the change required. By interrogating our values and our actions, and assessing the level to which they are ultimately acts of self-harm, provides us with the opportunity to create change that we can own by informing new belief systems that can strengthen positive values.

What we consume reflects these values. Every time we buy something or invest in something it should be a vote for what we believe in. It is a reflection of who we are. In a consumer-based capitalist system money is political – it can easily become weaponised, and many would argue that it has been, along with information. 

Every time we buy something or invest in something it should be a vote for what we believe in. It is a reflection of who we are. In a consumer-based capitalist system money is political – it can easily become weaponised, and many would argue that it has been, along with information

The system that should work for all of us appears to be only working for a few (if at all). It has become the source of our problems as a result of the behaviours and the values that have been coded into it. But like all good code, it can be rewritten. New values create new behaviours and can change the operating system. The stack re-stabilises. 

So how do we do this? Let’s look at snake antivenom. It is made from venom. The cure comes from the very thing that causes the problem. The same applies to a consumer-based capitalist system. What we feed it; it becomes. If we change our behaviours, we change the system.

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Top Tip

Research suggests 8 in 10 millennials consider the environmental and social impact of their investments, but in truth this is something we hear about more and more. Aligning a portfolio so that it reflects your values and also your risk and return parameters is no easy task however. You will increasingly find wealth managers offering “overlays” of this kind as a matter of course, as well as specialists in the ESG/responsible and impact investing spheres.

Lee Goggin - Co-Founder

Lee Goggin

Co-Founder

Making investment capital count

Impact investing is a demonstration of this. Looking for and investing in businesses that have the solutions to the social, economic and environmental challenges we face, supports the delivery of these solutions at scale and, hopefully, at pace. It makes financial sense – one only has to look at the amount of third-party studies on ESG alone to confirm this.

Impact investing aligns with our positive values. It becomes a true reflection of who we are (in other words, it works harder for us) and it is something many of us can do, from our pensions to our savings, to where we choose to bank and what we buy. This is an area where wealth managers, for example, can play a really positive role – for example, like Tribe Impact Capital. By working with you to help you identify your values Tribe is able to support you in making this change.  

Looking for and investing in businesses that have the solutions to the social, economic and environmental challenges we face, supports the delivery of these solutions at scale and, hopefully, at pace

Feeding in a different set of investment and purchasing criteria into the system, transaction by transaction, we create a positive difference. The early ripples of change eventually converge and create waves. Those waves then join and create oceans. Those oceans become the system. But the ripples start with us. No amount of capital is too small to create a positive impact. The same way no amount of capital is too small to create a negative impact. By infusing our values into our wealth, being clear on the change we want to see, we become the change that is required. And when more than 25% of us do it, well, then real change starts to occur.

Feeding in a different set of investment and purchasing criteria into the system, transaction by transaction, we create a positive difference. The early ripples of change eventually converge and create waves. Those waves then join and create oceans. Those oceans become the system

So, as we head into 2020, in what may well prove to be a Super Year, let’s all take the time to ensure that what we do, adds to our collective potential to do the thing we may currently think can’t be done. The power lies with us. It can be done. Let’s do it. 

“You must do the thing which you think you cannot do” —Eleanor Roosevelt.

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