The term "impact investing” appeared among insiders a decade ago, in the Anglo-Saxon world, and it is no coincidence that among the first to use it was a well-known American philanthropic organization, the Rockefeller Foundation. Each investment has an impact that affects not only the subject who benefits from it, but also the economic and social context in which that subject is inserted, the so-called "ecosystem" in which it operates. Those who choose to operate with this formula, in addition to the purpose of profit typical of any financial operation, also pursues the goal of generating a collective benefitconcrete and measurable. It can be defined as a form of investment devoted to sustainability, with a forward-looking view of social development.
To better understand what it is, you can refer to the definition provided by the Global Impact Investing Network (GIIN) in the document Introducing the Impact Investing Benchmark: “Impact investments are made by dedicated funds – or other types of organizations – in order to generate a social and environmental impact in addition to a financial return”. This last indication characterizes this type of investment with respect to traditional initiatives typically devoted to philanthropy and collective benefit; in this case, in fact, a financial return is also sought by aiming – rather than a profit – to ensure that the initiative itself can stand on its own legs, self-financing.
Impact investing can be aimed at emerging markets as well as established ones. First of all, those businesses linked to some of the most important and pressing challenges affecting the community on a planetary level are affected: fromsustainable agriculture to energies renewable, from the conservation oftechnology to the microfinance, untilhousing, to the protection of health andeducation
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A recent Italian example in this field is represented by the feasibility study developed by the CRT Foundation and the Human Foundation for the issue of a bond aimed at financing Cooperatives operating in some prisons in Turin.
The stimuli that should push those who usually work in a more traditional area of finance to consider this type of investment should be, first of all, the awareness that impact investing is aimed at bring concrete benefits not only to the recipient activity of the fund, but also to everything that surrounds it, thus helping to foster the growth of an entire system and fueling new opportunities.
As anticipated, it is indeed this aspect that differentiates impact investing from philanthropy: we don't talk about donations, but of activities which, while paying attention to protecting the environment in which they are going to act, aim to generate a return in economic terms.
Therefore, the challenges linked to development are met, targets and projects to be supported are identified, their prospects are assessed and finally where to allocate the investments is established. Impact finance attracts not only private funds, but also governmental institutions and realities.
I returns of this type of investments are generally equal to 3% for maturities that are assumed to be medium-long term. Furthermore, according to the data released by the GIIN in relation to 2016, the performances of these instruments are mostly on target (ie: in line with expectations).
As this is a relatively new industry, it is still cIt is difficult to establish exactly the amount of investments destined for this type of activity. Taking the GIIN data as a reference, it is still possible to observe a upward trend: a survey conducted in May last year shows a 16% growth in the world in twelve months, for a total of about 20 billion dollars invested by over 150 different companies in 2016. A trend that will probably continue to grow in the years to come, considering the development prospects affecting markets with a high rate of innovation and therefore with a high social impact.
°°°°° The author is the Secretary General of the National Association of Popular Banks
