Create your own job and grow in the impact investing space.
By Shannon Houde
After the 2008 financial crash, many of us were forced to reassess our lives, our careers and our values.
For those in the finance sector, this has been particularly true. I work as a sustainability career coach and, over the past few years, have found myself helping former bankers repair and repurpose their professional lives. Together, we've found that it is possible to make money while also making a positive difference in the world – you just have to know where to look.
Impact investing, for example, is emerging as a vibrant new field that seeks measurable social and environmental impact alongside financial return. According to the Global Impact Investors Network (GIIN), it provides capital to "support solutions to the world's most pressing challenges," including sustainable agriculture, affordable housing, affordable and accessible healthcare, clean technology and financial services. It'll come as no surprise it has been dubbed 'the new venture capital'.
Impact: Big Business
A recent report from JP Morgan and the GIIN shows measuring impact has become a norm for investors: 96 percent use metrics to measure social and/or environmental impact. What's more, a 2012 survey found that 99 self-identified impact investors had committed $8 billion to impact investments in 2012, with plans to commit another $9 billion in 2013.
So for finance professionals looking for prospects that don't push the boundaries of their ethical framework, this nascent sector could well hold the opportunity. Impact investors are uniquely positioned to spot opportunities that ordinary investors don't see, particularly in small, private markets. By providing below market investments, loan guarantees, subordinated debt or equity positions, longer terms before exit and flexibility in adapting capital investments to the enterprise’s needs, they offer capital benefits that enable social or environmental enterprises to experiment, scale up, or pursue their objectives to an extent that they otherwise could not.
Following the Impact
But what do those impacts look like?
This example from the Rockefeller Foundation shows how an initial investment trickled down through a nonprofit intermediary, to a local social business nonprofit, to an impact enterprise, and finally to one lady in a Brazilian slum, whose living conditions have been improved as a result. But while the Rockefeller Foundation may be famed for its philanthropy, JP Morgan is less so – yet its social finance business, operating since 2007, has supported social and environmental impact. One such investment gave capital to a Kenyan exporter of smallholder-supplied flowers in order to engage an additional 5,000 farmers by 2016.
There are many dedicated impact investment companies such as Al Gore and David Blood's Generation IM, Root Capital and the Omidyar Network, which was established by the founders of Ebay. And in response to investor requests for impact investment options, demand for impact fund managers is also growing: Big Society Capital (a British social investment bank) invests solely in social finance intermediaries, while the U.K.'s Department for International Development (DFID) has established an Impact Fund to invest in international intermediaries. They are also seeking to build fund manager capacity in the Global South.
Searching for an Impact Job
If you want to break into this dynamic and rapidly diversifying field, the first thing to do is your homework. Get to know the major players—we've already mentioned the Rockefeller Foundation and others, but there's also the Acumen Fund, Bamboo Finance and the Aspen Network of Development Entrepreneurs.
Then start to explore the many smaller organizations popping up all over the world. For finance professionals seeking new opportunities that align with sustainability values, there are a number of hubs through which to access this growing community. Amit Bouri, Managing Director of GIIN, recently told Forbes how organizations like his are helping to open up and improve the field's information infrastructure through groups, networks and online directories like Impact Base and the Impact Investing Directory.
Keep up-to-date with the latest news, case studies and reports through Twitter using the hashtag #impinv. Take part in webinars you come across to try to get to grips with the nuances and subtleties of the sector and make a point of attending any nearby conferences. GIIN also has a comprehensive jobs board. Don't just job hunt, though.
As Sasha Dichter, Chief Innovation Officer at the Acumen Fund, says, trying to get picked for the tiny number of jobs that exist is not necessarily the best approach:
"Instead, the opportunity is to create a job, a role, a set of experiences that will allow you, over time, to help us all shape and move and define this new space."
Good advice from a true thought leader.