Impact investing in public markets
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Krisztina is Chief Market Development Officer at GSG, the Global Steering Group for Impact Investment. Eric is head of Active Equities Impact Investing at Blackrock, the world’s largest asset manager. In our conversation, we discuss what makes impact investing through the stock market different from investing in private equity or other asset classes. We talk about what it takes to democratize impact investing and the role of shareholder engagement to achieve impact. Eric shares Blackrock’s strategy to build a universe of potential impact companies and explains how his team selects investees out of this universe. Krisztina walks us through the different standards for impact measurement. Our conversation also touches upon the role of the 17 UN Sustainable Development Goals (SDGs) to mobilize capital. We discuss that investments geared toward SDGs can achieve returns.
Key takeaways
- The market for investing in listed companies through the stock exchange is much bigger than the one for investing in private markets. However, impact investing is more established in private markets.
- For the average person, investments through the stock market are more accessible than investments in private equity or venture capital. Therefore increasing the role of impact investing through public markets also means democratizing it.
- When you invest through the public markets, your relationship with your portfolio companies is usually indirect. As many people cannot interact directly, your main lever to affect a company’s impact performance is through shareholder engagement including engaging with the asset manager.
Links
- The Global Steering Group for Impact Investment (GSG)
- The Impact Management Platform offers numerous tools for setting strategies around impact measurement
- Harvard’s Impact-Weighted Account Project seeks to drive the creation of financial accounts that reflect a company’s financial, social and environmental performance
- Krisztina recommends the DEI report by Rights CoLAB to understand market signals of diversity, equity and inclusion
- Blackrock showcases its approach to impact investing in the Summary Global Impact Annual Report 2021
About Financing Impact
Financing Impact is a podcast about funding and scaling societal impact. This podcast is brought to you by SciFi, the Societal Impact Financing Initiative at ESMT Berlin. SciFi is supported by the Bill & Melinda Gates Foundation, among others.
For feedback on the show or to suggest guests for future episodes, contact us at scifi@esmt.org
