Monday
April 2
2018

Perspective: Captalism’s new formula: Capital + Purpose = Social impact

By Amit Bhatia

The impact investing movement can create history so that our children and grand-children proudly ask “what went right?” instead of “what went wrong?”

Maybe it will help us forget that perhaps man’s greatest invention, money, ever became man’s greatest malady.

With impact investing, some of the things we could change can include the social injustice meted out to the three billion poor and rendering poverty to history. It could make the phrase “climate change” obsolete and restrict global warming to less than 1.5 percent.

Sir Ronald Cohen, the founder and chair of the Global Steering Group for Impact Investment, which works to accelerate the movement around the world, often says that impact investment is “an evolution in thought and a revolution in means”. This is an unstoppable movement and we are on the winning side of history.

According to our estimates, global impact investments crossed $150 billion in 2016 and will cross $300 billion by 2020. Moreover, we believe impact investments touched 500 million poor, i.e., one in six poor people in 2016; and will likely touch one billion poor by 2020, i.e., one in three poor people.

It is inspiring to see that great shifts are underway that will convert the malady into a remedy – a shift that ensures capital has a higher purpose. Incontrovertibly, we are creating a new formula: Capital + Purpose = Social impact.

This equation is the catalyst for our movement, which shares characteristics of major social and political movements in the last century.

Source: Thomson Reuters Foundation News (link opens in a new window)