Deep impact investing

In our sixth episode, Charly Kleissner shares his investment philosophy, which he calls “deep impact investing”. Charly came into wealth as a technologist building several very successful companies in Silicon Valley. He developed the basis for what later became Apple’s OS with Steve Jobs at Next, but considers the B2B eCommerce company Ariba his masterpiece. Since selling his Ariba stock, Charly has devoted himself to impact investing to give meaning to his wealth. He co-founded Toniic, a network for likeminded impact investors, to share knowledge and deal flow. Under the umbrella of Toniic, he also launched the 100% Network, a group of more than 160 asset owners committed to investing all their wealth towards positive impact. With portfolio sizes ranging from more than 1 million to more than 500 million, they have jointly committed 6 billion USD, with more than half currently deployed. Some of these portfolios are the basis for the T100 project, a longitudinal study of investments fully oriented towards impact. We discuss the role of research to analyze risk-return-impact profiles. Charly reflects on his role shaping the impact investing ecosystem and shares his thinking around systemic change as opposed to incremental progress. He also shares why he is opposed to cryptocurrency speculation but believes blockchain technology and tokenization will shape the future of impact investing.

• In addition to exchanging experiences, pooling capital and sharing due diligence and deal flow was the main motivation to create the impact investing network Toniic. Charly views trust as key for a successful network and has been intentional in how to establish it within Toniic.
• Charly argues that since most companies do not price in externalities on the social and environmental side, market-rate returns are not an appropriate benchmark for his impact investing. According to him, economic paradigms have overlooked that maximizing financial returns is not the main motivation of all investors. To change this, Charly and likeminded Toniic members share longitudinal data on their portfolios with researchers.
• Charly is critical of cryptocurrency but is an avid believer in the potential of blockchain technology to develop impact investing. According to him, tokenization in particular offers 3 advantages 1) accessibility for small-scale investors 2) liquidity 3) incentivizing for impact.

• Charly co-founded the Toniic network, a global community of asset owners seeking deeper positive net impact through their investments. The 100% Network is a subgroup of members committed to direct all their wealth towards impact.
• Otto Scharmer’s book Theory U influenced Charly’s approach to building trust in networks
• Toniic has initiated the T100 Project, a longitudinal study of investment portfolios 100% activated towards deeper positive net impact in every asset class. In addition to producing practitioner reports, it works with the Center for Sustainable Finance and Private Wealth (CSP) under the leadership of Dr. Falko Paetzold to publish academic research.
• Arne Naess’ work around deep ecology (a term coined in a 1973 article) led Charly to come up with the concept of “deep impact”.
• To analyze whether investments are systemic in nature, Charly points to John Fullerton’s principles of a regenerative economy and Kate Raworth’s Doughnut of social and planetary boundaries.
• Charly recently wrote his personal reflections and call to action on Humanity and Impact Investing at the Crossroad.

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