Monday
June 10
2013

Lisa Hall

The G8 Social Impact Investing Forum: A defining moment on the world stage

During the recent G8 Social Impact Investment Forum, I was inspired and encouraged as one of my favorite quotes by Victor Hugo was repeated several times: “There is nothing more powerful than an idea whose time has come.”

Impact investing arrived on the world stage last week, heralded as a transformative tool with the potential to reshape global capital markets in the years to come. Impact investing, very simply defined, is investing which generates both a social and financial return. Held at the Bloomberg European Headquarters, the forum was sponsored by the UK government, conceived of by the Big Society Capital Chairman Sir Ronald Cohen and attended by impact investment professionals from across the globe with delegates representing all of the G8 nations.

A highlight of the event was a keynote address by this year’s G8 Chair and UK Prime Minister David Cameron, who has included impact investing on his agenda as a part of his G8 presidency. Cameron spoke with passion about the power of impact investing to “tackle the most difficult social problems…problems that have frustrated government after government, country after country, generation after generation.” He also announced several policy efforts on the part of the UK government, reinforcing Europe’s leadership in the impact investing arena. In particular his proposal for tax relief could serve as a model for other G8 countries to follow.

Many attendees remarked that the forum was a defining moment for impact investing. Calvert Foundation was proud to be in attendance and to be a signatory on a letter organized by the Global Impact Investing Network (GIIN), endorsing impact investment along with more than 90 other institutions including banks, foundations, capacity building organizations, and multilateral funds. Together with many of these leading organizations we are in the trenches, helping to democratize impact investing.

(Left: The G8 Letter Signatories, click to see them all.)

The case for impact investing is clear. We face stark economic and fiscal realities at a time when climate change, the wealth gap between rich and poor, and social injustice make it more important than ever to secure financial inclusion for all. We realize that familiar models of public investment and corporate philanthropy alone cannot uphold our commitment to build and sustain thriving communities at home and around the globe. As an organization well positioned to bring impact investing into the mainstream, Calvert Foundation believes that this movement is fundamental to our organizational objectives. We are excited and inspired to be doing this work in concert with so many other visionary organizations who are similarly building the impact investing ecosystem. Together we are contributing to a new paradigm to empower all investors to become agents of economic opportunity, dignity, empowerment and social change.

For more than 18 years, Calvert Foundation has enjoyed a track record of success raising investment capital from more than 13,000 individual and institutional investors who have invested more than $567 million in under-resourced communities. Through the capital raised by selling our Community Investment Notes, Calvert Foundation has provided financing to affordable housing organizations, community facilities, microfinance institutions, and small and medium enterprises in more than 80 countries for nearly two decades. We’ve steadily grown our investor base and lending activity, helping to create jobs, build homes and improve lives in the U.S. and around the world. Throughout, we’ve maintained a 100 percent repayment rate to investors. We have demonstrated that it is possible to be responsible stewards of capital across a range of geographies and social impact areas, and we have grown our portfolio of loans over time, supporting the needs of markets and social sectors around the globe.

The forum highlighted several examples of impact investing, and I was proud that many of our investees and partners spoke on panels including d.light and Shell Foundation. In 2009 Calvert Foundation, in collaboration with the Lemelson Foundation, made the very first loan to d.light, a company that has now sold more than 3.2 million solar lanterns in the developing world. Donn Tice, the CEO of d.light, shared with me how critical our flexible and affordably priced loan was in helping them establish a track record of debt repayment, which later opened up substantial growth capital for them to expand their impact. In 2012 Calvert Foundation partnered with Shell Foundation and Barr Foundation to support Envirofit International, one of the largest efficient cookstove manufacturers, with working capital to scale their operations and bring improved cooking technology to families in Africa and India.

The forum was attended by several U.S. government officials representing the public sector, which has played a critical role in building pubic-private partnerships in collaboration with Calvert Foundation, including the Overseas Private Investment Corporation (OPIC), the Inter-American Development Bank (IDB) and the Small Business Administration (SBA). OPIC provides a guaranty for our microfinance lending and we have co-invested in loans with the IDB in Peru and Ecuador. And here in the United States the SBA is an important guaranty and subsidy provider, enabling impact investing through many of our CDFI borrowers who make small business loans to entrepreneurs in low and moderate income areas.

Today, more and more examples abound to demonstrate that deep social impact and financial return are not mutually exclusive. An unexpected and growing movement of investors is coalescing around this concept and it is clear that we are on the verge of a tipping point. We have the opportunity to accelerate this movement and mainstream impact investing as an imperative to meet the global challenges of extreme poverty and environmental degradation. It has been said that we are the first generation of people who will choose if we are the last. I am energized by our place in a community of leaders who have chosen a brighter path forward. We hope you’ll join us to sound a rallying cry for impact investing and make this brighter future a reality for all communities.

Categories
Entrepreneurship, Investing
Tags
Calvert Foundation, impact investing, investment fund