November’s Most-Read, Most-Shared Posts on NB
In November, transparency in impact investing – on both the investment fund side and the investee company side – was something worth pondering. As investing with social and environmental purpose continues to grow and bleed into the mainstream, so do the calls for clear standards and open access to what constitutes impact – e.g. who’s really profiting.
Our most-read post last month, Curbing the “Impact Impostors”: The growing movement toward transparency in impact investing by William Burckart, takes up this challenge. The third and final post in his series, which reflects on the book New Frontiers of Philanthropy, is critical of the bandwagon climate in investing, which is likened to adding a “.com” to everything back in 1999. Despite the advancement of new systems to validate impact, including the Global Reporting Initiative (GRI), Impact Reporting and Investment Standards (IRIS) and Global Impact Investing Rating System (GIIRS), “There is still a considerable gap between the rhetoric and the reality of what these tools can consistently offer,” says Brian Trelstad of Bridges Ventures in the book. Burkhart does see some signs of this changing.
Key blog quote:
“This movement toward transparency received a major boost earlier this summer with the appointment of former New York Mayor Michael Bloomberg and former Securities and Exchange Commission Chair Mary Schapiro to the Sustainability Accounting Standards Board (SASB). SASB is helping publicly listed corporations disclose material sustainability factors in compliance with SEC requirements by developing and disseminating a series of guidelines for capturing rigorous, credible, standardized and auditable evidence for public companies’ net contribution to society.
“The benefit of this effort is twofold, as it will: (a) increase the usefulness of information available to investors and (b) improve corporate performance on the environmental, social and governance (ESG) issues most likely to impact value.”
November’s Second Most-Viewed Post
Burckhart may well have been channeling Max Pichulik, who authored the second most-popular post on NB in November: NexThought Monday – Impact White Washing?: When any deal in a developing country with a few generic metrics can be considered impactful.
Pichulik doesn’t call anyone an impostor, but he does make the argument that given the way the system is set up, it’s exceedingly difficult to separate who is and who is not legit. As evidence, Pichulik provides the example of the TriLinc Global Impact Fund, which previously announced more than $1 million in additional trade finance to a South African textile importer and distributor through a revolving trade finance facility. TriLinc is a retail fund that is registered with the Securities and Exchange Commission (SEC) in the United States; and a representative declined to comment on the investment, citing those SEC restrictions.
Pichulik, co-founder of Impact Amplifier, an investment, supply chain and sustainability advisory firm based in Cape Town and Johannesburg, says that’s precisely the problem. Key quote:
“This caution, however, has created many questions among numerous ecosystem players in South Africa’s impact investing community, and has generated skepticism over whether this specific deal could have any significant positive impact locally.
“I can only speculate on TriLinc’s intended impact. By their reference to ‘low-income consumers,’ it would seem the intent is to provide South Africans with better access to affordable clothing. That may be a worthy cause, but is their capital actually providing that benefit significantly given the availability of other trade finance capital locally? And is TriLinc aware of some of the serious potential negative impacts that could result from bringing more cheap clothes made in Asia to the South African market?”
November’s Third Most-Viewed Post
Echoing Green, which has made more than 600 investments in more than 60 countries, was known as one of the biggest champions of social enterprise well before the concept gained currency. For the first time in its history, the organization held its annual fellows conference in Mumbai, India, instead of the U.S. NB contributor Nilima Achwal was there and spoke to Cheryl Dorsey, president of the social finance and support organization, who called Mumbai the “exciting global center for social enterprise.”
Achwal writes that USAID’s Global Development Lab has partnered with Echoing Green to “get more voices from the developing world working in the developing world” in sourcing, testing and scaling global development ideas, according to Tahalia Barrett, Global Partnerships Advisor at USAID. And Echoing Green recently partnered with Unitus Seed Fund (which, incidentally, just raised funding from Bill Gates) to branch into second- and third-tier cities in India. Key quote:
“While the social entrepreneurship movement in the ’90s was mostly confined to middle class American youth from well-resourced universities, today social enterprise is ‘exploding globally,’ according to Dorsey. This is due to in part to the developing world’s increasing technology, growing middle class, new rhetoric and action in youth leadership, and possibly a loss of faith among the younger generation in the ability of institutions to solve their countries’ problems. ‘The new wave of entrepreneurs will be indigenous entrepreneurs who may not even necessarily identify themselves as social entrepreneurs,’ predicts Dorsey.”
November’s Most-Popular Posts on Social Media
Yadav and Bernstein reflect on “mass production” health systems after the deaths of 13 women in Chhattisgarh in central India. They died after undergoing sterilization in a high-volume, low-cost “mass production” type campaign commonly termed “surgical camp,” they write. But the real market failure here is getting less focus, says Yadav ( who is director of the Health Care Research Initiative at the William Davidson Institute) and Bernstein, chairman and CEO of Eniware, which makes devices designed to provide low-cost sterilization.
“What baffles us is that there is very little attention being paid to a clear, immediate reason for the danger of these sterilization procedures – use of un-sterilized surgical equipment. The lack of readily available sterilization processes in developing countries, including India, is a major risk factor for post-surgical septic shock and other infections. In facilities in the developed world, all instruments are sterilized before any invasive procedure. This is a basic standard of care that has been taken for granted for over a century. Dipping instruments in disinfectant is not sterilization. Yet sterilization technology, which allowed surgical care to enter the modern era, has not progressed beyond the electricity-dependent autoclave that was invented over 150 years ago. Sterilization is still not feasible in any low-resource setting. Often, the hospital or clinic has an autoclave but a lack of maintenance, repair and fluctuating or total absence of power render it useless. Moreover, the autoclave’s dependence on steam means that many modern medical devices are degraded by autoclave sterilization, rendering this old technology useless even in places with reliable electricity access.”