Do investment professionals know about impact investing? We asked this question in last week's Financial NewsBrief poll and found that a clear majority (66%) of the 727 respondents were unaware of impact investing. In this video interview, Harry Hummels, an academic and a practitioner in impact investing, explains impact investing and shares his insights on how and why impact investing is similar to and different from traditional investing.
Here is a quick breakdown of the video for your convenience.
0:56 – 2:39: What is impact investing?
2:40 – 3:45: How is impact investing different from sustainable and responsible investing?
3:46 – 4:24: Who are the investors in impact investing?
4:25 – 5:50: What are some of themes in impact investing?
5:50 – 6:59: What are the asset classes impact investors invest in?
7:00 – 11:00: What are some of the examples of impact investing?
11:01 – 12:35: What is the track record of impact investing?
12:36 – 14:29: How does the Global Impact Investing Network (GIIN) serve impact investing?
14:30 – 16:48: What challenges are faced by impact investing?
16:49 – 18:00: What message would you like to give to global investment profession regarding impact investing?
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6 Comments
Great interview! I am well aware of the concept of impact investing. When it comes to the challenges, I think awareness is one of the key factors along with the professionalism that Harry has mentioned. Some countries are doing well from the awareness perspective, but countries like India needs to gain some momentum.
Thank you for the feedback Neel. We also have a video interview on social impact bonds that may interest you. Here is the link:
http://blogs.stage.cfainstitute.org/investor/2012/06/19/innovation-in-i…
Thank you for discussing this interesting topic and thanks to Professor Hummels for the very helpful information provided. It would be also useful, in future occasions, if you could focus on some details about the measuring tools or the key performance indicators related to impact investing as well as if there are any benchmarks that could be used to assess the performance of such investment philosophy.
Maryam Baqer
Thank you for the kind comment. We have posted a blog post as suggested by you,
Impact Investing: How Do You Measure Social and Environmental Impact?
http://blogs.stage.cfainstitute.org/investor/2013/09/23/impact-investin…
Unfortunately, Harry Hummels exhibits of the biggest challenge Impact Investing faces. He lacks a sound approach to identify, evaluate and make decisions about impact. More measurement, more numbers, more metrics are not going to cut it - I say that as a mathematician, CA, and CFA Charterholder. I am an Integrated Investor - I make investment decisions integrating information from analysis, emotion, intuition and body. It is only with integrated investment decision-making are we going to see any real positive change and innovation.
The financial markets were highly measured before the 2008 crash - which evidences that people's behaviours around measurement can do a lot of harm. Numbers can be manipulated, chasing measurable things becomes a never-ending chase, circumstances can change, yet you could continue to measure the same thing which is no longer meaningful, and a highly measured system discourages experimentation and innovation because they do not appear on the same scale of measurement or are considered negative.
Professor Hummels demonstrates a disconnect with understanding what is impact. Impact is improving or increasing access to Essential Resources for people. By Essential Resources I mean things that enable people to sustain themselves, express themselves, connect with others, manage change and make decisions.
For more information about more integrated approaches to impact investing, have a look at:
http://piqueventures.com/impact-lens-updated/
http://bonnie.foleywong.com/impact-investing-naturally/
Best regards,
Bonnie Foley-Wong (née Wong), CA, CFA, BMath, MAcc
detailed and useful video thanks i really learned a lot