What is the case for impact investing

Deutsche Oppenheim Family Office - Market Report (2021)

From page 28 you can find an interview with Andreas Rickert (2nd chairman of the Biii) on the topic of green evolution for investments. The demand for sustainability-oriented investment opportunities and sustainable portfolios is increasing sharply. But what is impact investing, ESG investing and socially responsible investing and how can the terms be differentiated from one another in a meaningful way? What is the current supply and demand side and how can the sustainable impact of the investments be measured? Rainer Herber, Director of Investments at Deutsche Oppenheim, spoke to Dr. Andreas Rickert, Chairman of the Federal Impact Investing Initiative, on the current challenges, developments and implementation options in the field of alternative investments.

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SN Business & Economics - Impact investments: a call for (re) orientation (2021)

The term impact investment is often used synonymously for investments that take environmental, social and governance aspects (ESG) into account. In the latter case, achieving a transformational change is not the main purpose of such investments, which is why there is a risk of impact washing (similar to “green washing”). In order to offer (re) orientation from an academic point of view, we derive a new typology of sustainable investments. This typology provides a precise definition of the impact of investments and their coverage. As a central contribution, we propose to differentiate between impact-oriented investments and impact-generating investments.

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KfW Development Bank - Innovative Development Finance Toolbox (2020)

This toolbox is based on the international experience and advice of KfW Development Bank and the BMZ on new approaches and financing instruments. There are some approaches that can and should also be tried out in Germany (e.g. endowment, structured funds, guarantees, impact linked finance).

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Nuveen Real Estate - Think Europe Impact Investing in Real Estate (2020)

This article combines an insight into the impact investing ecosystem with real estate with examples such as “Affordable housing in Germany.” The built environment shapes people's lives like hardly any other sector. The impact real estate can have on people, their homes and their working lives is far greater than in most other sectors of the economy. All buildings should be healthy, comfortable and sustainable places to live. In the case of impact-oriented real estate investments, the focus is on the identification of local needs and impact-oriented action to improve the local quality of life. It is entirely possible to invest in ways that address the long-term needs of the community, generate employment and provide basic services. Homeowners will also have a role to play in promoting social inclusion by investing in underserved areas and focusing on buildings that meet the real needs of the community. This can create urban spaces in which people can develop.

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BlueOrchard - Sustainable Infrastructure in Emerging Markets (2020)

Emerging countries have a pronounced and far-reaching need for infrastructure development. According to the United Nations, there is currently an annual investment gap of approximately $ 2.5 trillion in developing countries, which poses a significant challenge to efforts to overcome poverty and inequality. However, in this challenge also lies the opportunity. Public and private investors have the opportunity to leverage the growing global awareness of sustainable infrastructure to create new and lasting partnerships that use capital for this purpose.

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HBR - Impact Investing Won’t Save Capitalism (2020)

Many companies and investors have opted for “impact investing”. Some believe it could be the "revolution" that will save capitalism and solve many of the world's greatest problems. This is an enticing vision, but the authors believe that investing as traditionally designed will not be enough. What is needed is a reform of the rules that govern the way our economy works - and the impact that investors have is crucial.

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BlueOrchard - Protecting low-income communities through climate insurance (2020)

We are already living with the effects of climate change. Extreme weather events such as floods and droughts are increasing in intensity and severity around the world, resulting in economic losses estimated at $ 2 trillion over the past decade. These climate impacts affect poorer people in developing countries, especially those who deal with the climate, disproportionately sensitive sectors such as agriculture. Measures to adapt to climate change are necessary to protect life and livelihoods and to achieve the goals of the UN Sustainable Development Goals (SDGs). The insurance sector plays a vital role in facilitating adaptation to climate change. When used appropriately, insurance can become a critical tool in preparing for and withstanding adverse events.

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Ashoka - Embracing Complexity (2020)

"A cheer for complexity: How do we (more) finance systemic changes?"

The exciting report in cooperation with Ashoka, McKinsey & Company, Catalyst 2030, Co-Impact, Echoing Green, Schwab, Skoll and System IQ provides new insights into the questions of how systemic changes can be financed more effectively worldwide and how change can be used for the benefit of Society can be better supported.

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Elite Report

What is the need for development in terms of the market structure for impact investing in Germany and what will the federal Impact Investing initiative do to increase the efficiency of the market?

Martin Vogelsang, coordinator of the federal initiative and Peter Brock, head of the family offices working group of the federal Impact Investing initiative, have published an article on this in the Elite Report published in Munich.

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UK NAB - Re-visioning Social Investment (2019)

This current report from the UK National Advisory Board takes stock of the situation with numerous case studies and market surveys. At the same time, an agenda is being developed for the further development of the UK ecosystem for impact investing as part of a global movement.

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EVPA - 15 Years of Impact - Taking Stock and Looking Ahead (2019)

On the occasion of its 15th anniversary, the European Venture Philanthropy Association (EVPA) takes a look at the European Venture Philanthropy / Impact Investing ecosystem. 70 experts from all over Europe give an overview of what has been achieved and where the journey should go, so that social investing continues to gain in importance. The focus of the EVPA, which now has more than 300 member organizations, is on Investing for Impact.

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SEND e.V. - Reform of dormant bank accounts (2019)

Germany is the only G7 country that has no legal basis for using dormant bank accounts. This withholds between € 2 and € 9 billion in potentially investable assets. Ashoka, the Social Entrepreneurship Network Germany, the Federal Impact Investing Initiative and the Association of German Heir Investigators have written a study on the subject of dormant bank accounts in which they present a model for an impact fund.

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FERI - Impact Investing: Concept, areas of tension and future prospects (2019)

The study by the FERI Cognitive Finance Institute comes to the conclusion that the market for sustainable investments has grown at an above-average rate in recent years. However, sustainable investments on the stock exchange did not achieve any direct, ethically-oriented effects, as they do not provide any new capital to the companies involved as secondary market transactions. Impact investing, on the other hand, has a direct social or ecological impact by providing new equity or debt capital. The FERI study discusses current questions about the role of impact investing, such as impact measurement and desired societal, social or ecological impacts.

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Ashoka - Doing Democracy (2019)

There are fewer functioning democracies today than there were a few decades ago. Above all, populism, polarization and the low level of civil participation in representative democracies represent a growing problem. This is where the potential of social enterprises lies: They can meet current social dynamics with innovative ideas. To this end, Ashoka carried out an analysis of the world's 25 leading social enterprises. The result are seven strategies that can strengthen the democratic system again.

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SEND e.V - Financing and funding instruments for SE (2019)

According to the study by SEND e.V. and KfW, the biggest obstacle to growth in the social entrepreneurship sector is limited access to finance. The question therefore arises: What can a funding and financing landscape look like that leads to stable and stronger growth? Which framework conditions have to be applied for this? In response to this, SEND e.V. and KfW developed 12 demands and possible solutions in a cross-stakeholder dialogue.

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FNG - Market Report Sustainable Investments. Germany, Austria and Switzerland (2019)

Since the action plan published in March 2018, a new dynamic has emerged in the market for responsible investments and sustainable investments. New EU regulations affect both forms of investment and lead to the next stage of development of sustainable investments. In Germany, Austria and Switzerland, the total of sustainable investments has risen sharply - with new growth dynamics. In Switzerland, for example, this was 72 percent, in Austria 44 percent.

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Bertelsmann Stiftung, Sphaera & Artha - Impact Platforms (2018)

"The unified whole is better than the sum of its parts"

At the end of 2018, the non-profit organizations Artha and Sphaera published an international study on the existing impact platforms commissioned by the Bertelsmann Foundation. The goal: On the basis of an online survey, the problems and challenges of existing platforms should be clarified and a better understanding of existing business models and motivations achieved. The study concludes that a lack of taxonomy and a lack of interoperability and replicability are among the major obstacles that have hindered scalability so far. At the same time, there is a strong desire for more cooperation and coordination with one another in order to achieve a unification of the platforms into a larger whole.

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Initiative For Responsible Investment - National Advisory Boards and Impact Investing (2017)

The study by the Initiative for Responsible Investment at Harvard Kennedy School examines some of the National Advisory Boards (NABs) for impact investing, which have been set up in 25 countries since 2013. The authors wanted to analyze and compare the different strategic orientations and goals of these local stakeholder networks. This should, among other things, help to better understand the regionally different forms of impact investing.

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Bertelsmann Stiftung - Social Impact Investment in Germany Market Report 2016 (2016)

The follow-up report to the first NAB study from 2014 comes to the conclusion that impact-oriented investing is still a niche market, albeit with a rapidly growing dynamic. Impact-oriented investable assets have tripled within three years. This testifies to a new social entrepreneurial way of thinking. There is a growing desire to combine the provision of capital with the achievement of a positive social impact. This requires a coordinated market development with clear structural framework conditions.

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McKinsey - Achieving impact for impact investing. A road map for developed countries (2016)

An investment of EUR 50 billion is forecast up to the year 2025 in order to meet the future social challenges in Germany, which the authors include an aging population, a massive increase in long-term unemployment, the shortage of skilled workers and the lack of affordable housing. As a growing niche market, impact investing could play an important role in overcoming these challenges.

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Bertelsmann Stiftung - Impact-oriented investing. New sources of finance to solve societal challenges. (2014)

The market report of the National Advisory Board for Impact Investing (NAB) from 2014 comes to the conclusion that Germany will have to mobilize more private investment capital in the future in order to promote innovative and promising solution models. This is where the potential of impact-oriented investing (SII) or social impact investment (SII) lies. This form of private capital investment goes beyond the pure profit orientation and thus builds a bridge between positive social effects and the provision of capital. The effect should be as explicit and demonstrable as possible. Measures are therefore required for the purpose of prevention, innovation and scaling.

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