New Show – Investing in Impact Podcast: The show interviews impact investors and VC’s from around the world to connect impact entrepreneurs with insight into funding, scalability, and company structure to inspire more impact companies around the world.
The world of social impact investing is expanding rapidly. In 2012 the Forum for Sustainable and Responsible Investment reported $3.31 trillion in US assets held by 443 institutional investors and 272 money managers. In addition, 1,043 community investment institutions applied ESG standards into their investment portfolios. One of the most interesting parts about social impact investing is the returns investors are seeing.
A 2015 Report by Morgan Stanley indicated that sustainable investing funds have actually met or exceeded the median returns of traditional equity funds. The report also made an excellent point about volatility. The report states that 72 percent of the companies surveyed with a social impact purpose showed higher profitability and lower volatility. This is important to note, because where there is low volatility and growth in a certain sector, big sums of money tend to pour in.
According to a US SIF’s 2018 Report on U.S. Sustainable, Responsible and Impact Investing Trends, investments that take into consideration environmental, social and governance (ESG) factors now stand at $12 trillion. That’s approximately 1 in 4 dollars of the $46.6 trillion in total assets under professional management in the U.S. This represents a dramatic 38 percent increase over 2016.
As advisers and fund managers approach clients and investors they can now come with tangible evidence that putting money into social impact investing can be profitable and less risky then traditional markets. In fact, since 1990 the MSCI KLD 400 Social Index fund outperformed the S&P 500 on an annualized basis, with the MSCI KLD 400 achieving an annualized return of 10.14%, compared to 9.69% for the S&P 500.
The future of social impact investing
As Millennials start to gain more and more equity in the markets this is an absolute sector that will continue to grow. 90% of Millennials would switch brands to one associated with a cause, so why wouldn’t Millennials switch to investments with these same values as well. With these numbers social impact investing is poised to be a huge trend.
Below are financial ventures changing the world through social impact investing. Whether they are investing in organic farmland, fintech, innovative entrepreneurs, or sustainable energy, these companies, entrepreneurs and organizations are using their funds to create a better, more sustainable world.
Tin Shed Ventures™ is Patagonia’s corporate venture capital fund, which we use to invest in environmentally and socially responsible start-up companies. It takes its name from the blacksmith shop where Patagonia founder Yvon Chouinard forged pitons, and then made removable hardware that enabled a clean-climbing revolution. That Tin Shed in Ventura, California, still stands alongside our corporate headquarters, as Tin Shed Ventures funds the next generation of responsible businesses.
HEED Capital is an impact venture fund normalizing sustainable innovations. They help mission-driven founders across the globe transform the world’s biggest challenges into the world’s biggest business opportunities. They also build long-lasting partnerships with founders supporting them on the journey and helping them accelerate impact.
The Global Good Fund identifies high-potential leaders and accelerates their success through a year-long, virtual Fellowship focused on leadership development. They support global social entrepreneurs with proven methods, such as executive mentorship, leadership coaching, and access to capital, to accelerate their growth and impact. The Global Good Fund believes investing in leadership development is the best tool for enterprise growth and achieving global good.
Since 2013, the signature Global Good Fund Fellowship has developed 105 entrepreneurs who are now accelerating their enterprise growth in 30 countries and beyond. Over 2,400 high-potential entrepreneurs from more than 100 countries applied for one of 12 Fellowship positions in 2018.
The mission of Impact Engine is to bring more capital to a market where financial returns are linked to positive social and environmental impacts. The team manages funds for institutions and individuals that invest in for-profit, positive-impact businesses in private markets, and bring community together in service of building the impact investing field.
New Age Capital is a seed stage venture capital firm and lifestyle company investing in tech and tech-enabled startups founded and led by black and latino entrepreneurs. Their mission and vision is to create and support a world where people of all races, ethnicities, cultures, lifestyles and environments are exposed to new ideas, democratized information and boundless opportunities through the use of technology.
Reach Capital invests in educational startups that strengthen communities. Their portfolio is made up of more than companies. Itʼs made up of people bold enough to build something for the betterment of others, the ideas big enough to change the way we learn, and the imagination, commitment and audacity to challenge the status quo. Every team member at Reach sees education as a transformative part of our lives. This deep connection to education has brought them together.
The De-Carceration Fund is designed to invest and support highly innovative enterprises that are working to eliminate the suffering caused by the US Criminal Justice System through a radically different fund model that is focused on returning power to those who have had it taken away from them.
The US Criminal Justice System directly impacts 6.6 million people, at a direct cost of more than $80 Billion per year. This profoundly broken system is marred by racial disparities, extractive business practices, and misaligned incentives.
The vast majority of private sector solutions in this sector are driven by misaligned incentives and exploitative business models, however the opportunity exists to find highly innovative and non-extractive private sector business models that address the injustices of mass incarceration. The fund will invest in ventures that are working to Prevent Entry, Reduce Suffering, and End the Cycle.
Through a one-pocket approach, Access Ventures’ investments are centered around the belief that the economy represents not just an engine for industry, but an opportunity to demonstrate the inalienable dignity of all people and a system that prioritizes people will be more inclusive and creative.
CNote is an award-winning financial platform that makes it easy to invest with impact. Every dollar you invest with CNote helps fund female and minority-led small businesses, affordable housing development, and financially underserved communities across America. In the last year, CNote’s members invested millions into local communities, creating and/or maintaining over 1,400 jobs. CNote was founded on two core principles. That financial products should not just serve a wealthy few, and that financial prosperity doesn’t have to be a zero sum game; you can make money and do good at the same time.
1863 Ventures accelerates black and brown entrepreneurs from high potential to high growth, through rigorous leadership training and strategic market access. The thesis is that entrepreneurship is becoming an increasingly viable pathway for the New Majority to build wealth. The goal of 1863 Ventures is to facilitate this trend by reducing barriers and risk for these founders across the nation.
Over the past several years, 1863 Ventures has had the honor of working with over 2,500 early-stage and growth-stage founders through our formal programs across a multitude of sectors and industries. With a membership representing nearly $300M and several thousand jobs, 1863 is fortunate to have crossed paths with some of the best and brightest founders in the nation.
Better Ventures backs entrepreneurs building a better world. They provide funding and support to early-stage technology companies pursuing social and environmental objectives with high-growth business models. Better Ventures typically invests $100-250k at the seed stage, get actively involved with the founders to help them build successful companies, and provide larger follow-on investments through Series A and beyond.
Collab Capital is a $50mm fund that helps Black founders build sustainable businesses. Collab Capital creates a growth solution for Black founders seeking capital, who value profitability, ownership, and optionality.A key pillar to solving the growing US racial wealth gap is business formation and growth in the Black community. In order to ensure more Black founded businesses have the resources they need to be successful, the ability to maintain majority ownership, and increase revenue, we’ve designed a new investment model which aligns our interests with those of the founders we support
Orthogonal is a Socially Conscious Holding Company. As such, they only invest in companies which benefit people and our planet. Their dynamic financial structure allows shareholders to indirectly own a piece of multiple companies. In this regard, the company is similar to Berkshire Hathaway and Alphabet. Thier focus is primarily in the Life & Plant Sciences space. They help bring to market visionary ideas which solve critical challenges across the health, wellness and sustainable development ecosystem.
REDF (The Roberts Enterprise Development Fund) is a venture philanthropy that advises and invests exclusively in social enterprises that employ and empower people overcoming barriers to work. REDF creates jobs and transforms lives like no other organization in America. They are the leader of a national movement of jobs-focused social enterprises, the successful brand of businesses that invest the money they make into helping their employees get a lasting shot at a better life.
FullCycle invests to accelerate the deployment of technologies that address the greenhouse gases with the highest warming potential in the first 20 years of emission (GWP20). These high-impact climate pollutants (CH4, HFC, N2O, etc) make up 24% of atmospheric greenhouse gases, while being responsible for close to 50% of global warming.
FullCycle developed a unique investment model, specifically designed to accelerate the deployment of the climate critical technologies. These technologies must exceed our threshold for Carbon Return on Investment (CROI-20) and deliver above market returns on a risk adjusted basis.
A certified B-Corp, Big Path Capital is built with a team of innovative leaders expanding the path for business interests seeking multiple bottom line interests, taking the new economy from the margins to the mainstream, seeing the financial world generate good as it generates returns. As a global firm, Big Path Capital is advancing a sustainable economy connecting mission-driven companies and fund managers with mission-aligned investors.
The Reinvestment Fund (TRF) is a national leader in rebuilding America’s distressed towns and cities, through the innovative use of capital and information. TRF achieves its mission through investing, housing development as well as data and analytical services. TRF’s investing activity creates affordable homes, quality educational opportunities, access to healthcare and healthy food, jobs and thriving businesses in neighborhoods that need them most. TRF’s housing development activity is concentrated in distressed markets, where TRF uses a “build from strength” strategy that reinforces local assets to create healthy communities.
Ellevest is a transformative financial technology company created to help women achieve their financial potential through modern, low-cost investing, with a beautifully designed digital platform backed by a unique investing approach. From a gender-smart investing algorithm for digital-only customers to bespoke portfolios for private wealth clients, Ellevest also provides the option to invest for impact and in other women. Ellevest is for those who believe that because women generally have longer lifespans and are typically paid less than men, the old approaches haven’t worked for everyone — and that when women thrive, everyone is better off. Ellevest is led by Sallie Krawcheck, called the “Last Honest Analyst” by Fortune Magazine, and was named one of NerdWallet’s Best Robo-Advisors in 2019 and 2018.
Acumen’s mission is to change the way the world tackles poverty by investing in companies, leaders, and ideas. They raise charitable donations to invest patient capital in business models that deliver critical goods and services to the world’s poor. Since 2001, Acumen has globally invested more than $83 million in 73 companies. Acumen also works to build a global community of emerging leaders that believe in creating a more inclusive world through financial and operational expertise combined with moral imagination.
Fig changes the way people with bad credit experience banking. They offer emergency loans and financial stability products to get individuals through unpredictable financial challenges. Fig stands behind a commitment to offer financial products to customers in a socially responsible way. Figs fees are designed only to cover the costs of serving the Fig Loan — that’s it. Their loans provide customers with the most affordable product when they need it most. Fig does not look at a traditional credit score when making loan decisions. Instead the company looks at your ability to repay the loan based on account age, income, and existing or previous loans.
Dreamlabs is a $50 million fund established to invest in companies, leaders, and ideas that positively impact the lives of people. The aim is to work with entrepreneurs who seek to invent new market categories or transform and disrupt existing ones. The main focus is to invest in entrepreneurs with ideas that will generate both strong social & financial returns.
Adobe Capital is a social impact investing fund focused on triple bottom line businesses that drive social and environmental impact with innovative, profitable and scale-able models. They provide financing and strategic support for the development of success cases. Adobe Capital invests in Mexican companies with fewer than 50 employees, with less than 5,000,000 USD in sales and strong growth potential. Larger companies may be analyzed in specific cases. Adobe Capital seeks investments that generate economic, social and environmental benefits, i.e. in “triple bottom line” investments and seeks to strengthen business strategies to ensure a sustainable growth by providing strategic support. Adobe Capital promotes the growth of the impact investment sector by demonstrating that small investments in social and environmental SGBs can be made in an efficient and profitable manner.
The Ecosystem Integrity Fund is focused on identifying promising solutions to key threats to the ecosystem, from the perspective of both investment value and environmental benefit. The partners have the diverse and complementary skills and backgrounds needed to invest in clean technology enterprises, platforms, projects, and project developers. Together, the partners have expertise in commercial finance, investment evaluation, and research consulting across a wide array of sectors related to clean technology and natural resources. Additionally, the leadership of Ecosystem Integrity Management bring senior-level operating experience to the management of the Fund’s portfolio investments. Beyond investment management skills and clean technology expertise, the team has a robust network of venture capitalists, family office investors, public corporations, entrepreneurs, research labs, technology specialists, and consultants that are active in environmental sustainability.
Across the developing world, the rural poor—approximately 75 percent of the 2.6 billion people living on less than $2 a day— are marginalized from the formal economy. Most of these people depend on agriculture as their primary source of income. Without access to capital and viable markets for their crops, millions of small-scale farmers in the developing world are trapped in a cycle of poverty. Root Capital, a nonprofit social investment fund, grows rural prosperity in poor, environmentally vulnerable places in Africa and Latin America by lending capital, delivering financial training, and strengthening market connections for small and growing rural businesses. Root Capital’s lending is directed towards businesses that are too big for microfinance, but generally unable to secure credit from conventional commercial banks – “the missing middle” of developing-world finance.
Human Ventures is a business creation platform. The firm goes beyond the business model to build and invest in Model Businesses with ambitious founders who are innovating around Human Needs. By unlocking access to a powerful network of founders, investors and corporate partners, Human Ventures is creating a blueprint for the future of business to be built on purpose.
The SDG Impact Fund develops sustainable financial resources to fulfill its mission, and to ensure the continuity of charitable organizations supported by our donors and their families. The SDGIF develops and manages endowments, planned giving, private-label DAFs, and donor advised philanthropic funds. Our grants are provided for innovative programs, domestic/international development, domestic and foreign crisis, and securing the operational activities of charitable organizations for generations to come.
Vital Capital is a leading social impact investment, private equity fund focused on improving the well-being of underserved sub-Saharan African communities while generating market rate returns for its investors. Since the inception of its 1st fund (US$350M) in 2011, Vital has been demonstrating its No Trade-Off approach, by investing at-scale in the most impactful sectors across sub-Saharan Africa such as affordable housing, healthcare, water, agriculture and renewable energy. By systematically utilizing proprietary and industry standard impact metrics, rigorous financial underwriting and ongoing hands-on operational oversite, Vital is demonstrating the achievement of significant and tangible quality of life improvements for large local populations, while on-track for delivering risk-adjusted returns for its investors.
Domini Social Investments is a firm specializing exclusively in social impact investing. They manage mutual funds for individual and institutional investors who wish to integrate social and environmental standards into their investment decisions. When you invest with Domini, you as a shareholder are making an impact. As a shareholder you will invest in companies that are solving major issues such as global warming, sweatshop labor, and product safety. Revitalizing distressed communities. Bringing new voices to the table. Redefining corporate America’s bottom line. Invest for your future while helping to build a world of peace and justice.
Global Partnerships is a nonprofit impact investor whose mission is to expand opportunity for people living in poverty. GP creates opportunity for people living in poverty to earn a living and improve their lives by investing impact-led capital in social enterprises that bring sustainable opportunity to millions. Since inception, GP has invested $190 million in 89 partners across 14 countries. To date their work has impacted over 4.1 million lives.
Alterfin’s shareholders consist of non-governmental development organisations, banks and over 5.000 individuals. Alterfin inests in microfinance institutions, producers’ organisations and SMEs involved in smallholder agriculture in Latin America, Africa and Asia. Their mission is to achieve human dignity in developing countries by promoting individual and collective economic activities. Alterfin aims to link people in the North willing to invest their money in a sensible way to organizations in the South that extend credit to local entrepreneurs and farmers who can use such a loan to build a better future.
The U.S. Fund for UNICEF Bridge Fund is an innovative financial tool created by the U.S. Fund for UNICEF to speed life-saving assistance to children in need. The Bridge Fund provides flexible capital, enabling UNICEF Supply Division to react immediately when children’s lives are at risk to fast-track programmatic activity or the purchase and delivery of vital health, educational and other essential supplies. The Bridge Fund helps save the lives of vulnerable children by reaching them when every minute counts, buys time to secure better pricing and ensures a continuous supply of safe commodities from reliable manufacturers.
One Acre Fund supplies smallholder farmers with the financing and training they need to grow their way out of hunger and poverty. Instead of giving handouts, One Acre Fund invests in farmers to generate a permanent gain in farm income. They supply a complete service bundle of seeds and fertilizer, financing, training, and market facilitation—and deliver these services within walking distance of the 400,000 rural farmers they serve. One Acre Fund began in East Africa, and now currently serves farmers in Kenya, Rwanda, Burundi and Tanzania.
The Media Development Investment Fund invests in independent media around the world providing the news, information and debate that people need to build free, thriving societies. Timely, accurate, relevant information is critical to free societies, enabling fuller participation in public life, holds the powerful to account and protects the rights of the individual. The MDIF has investments in more than 100 media companies in 38 countries. They have provided more than $134 million in financing, including $117 million in debt and equity investments. MDIF has received $63 million in recovered principal, earning almost $40 million in interest, dividends and capital gains, and returned $28 million to investors.
Bamboo Capital Partners is an impact investing platform which provides innovative financing solutions to businesses in emerging markets serving the needs of low- and middle income populations, thus catalyzing lasting impact. We bridge the gap between seed and growth stage funding through a full suite of finance options – from debt to equity – which we activate unilaterally or through strategic partnerships.
The Accion Frontier Inclusion Fund is the first global emerging markets fintech fund for the financially underserved. The Fund invests in innovative financial technology and services companies that promote financial inclusion for the two billion people around the world who lack access to savings accounts, checking, insurance, credit, and other basic financial services. Accion is striving to reach the nearly three billion people worldwide who still seek these crucial financial services. In the area of investing, Accion provides equity, quasi-equity, and loan guarantees to help grow companies sustainably and support a financial ecosystem that will radically enhance the efficiency, reach, and scope of financial services at the base of the economic pyramid.
SustainVC is the manager of a series of early-stage impact investing venture capital funds that makes market-rate equity investments into early-stage companies creating meaningful social and/or environmental impact. Led by a deep team with more than 100 years of investing, startup, and consulting experience, SustainVC has built a 10-year track record of demonstrated, measurable impact as well as proven financial returns.
Farmland LP is a U.S. real estate fund that acquires conventional farmland and converts it into Organic, sustainably managed farmland. We specialize in enhancing soil fertility and productivity through science-based livestock and crop rotations. We currently own and manage 6750 acres of farmland currently valued at $50 million in the San Francisco Bay Area and Oregon’s Willamette Valley. More than 10% of our acreage is certified Organic and the rest is in transition. Through our expertise in agriculture, soil biology, real estate, and farm management, we have forged a new model for how farmland is owned and managed. Our model benefits farmers, investors, the environment, and consumers. Our investors benefit from the security of owning farmland while participating in the growth and profitability of local, Organic food markets. Our fund intends to demonstrate that sustainable agriculture at-scale is more profitable today than chemical-dependent commodity agriculture.
CRF fills a gap in community development funding by bringing a larger amount of capital to the communities that need it most. This has a powerful impact, creating a huge ripple effect and improving more lives of disadvantaged people in distressed neighborhoods all across the country. Together with lending partners, they provide small business loans not found elsewhere for people living in underserved communities so they can. CRF has provided more than $1.5 billion to finance small businesses, affordable housing and community facilities in 47 states and more than 750 communities. These loans have improved the lives of more than 613,000 people by creating jobs, funding small business growth, affordable housing, community facilities, and by providing highly personalized loan servicing for low-income homeowners. CRF blends philanthropic giving with socially motivated investments from foundations and market rate investments from institutional investors that otherwise would not invest in community development in low-income communities.
Vox Capital is Brazil’s pioneer and leading impact investing firm. Founded in 2009, it invests in high potential start-ups serving the Brazilian low-income population delivering solutions in health, education and financial services. Currently, Vox Capital manages over USD 50 million in assets and has invested in over 20 companies. Vox Capital is member of ANDE (Aspen Network of Development Entrepreneurs) and was a founding member for its Brazilian chapter. It is also an active member at ABVCAP (Brazilian Venture Capital Association). Vox is a founding fund at GIIRS (Global Impact Investing Rating System).
The Grassroots Business Fund (GBF) is a global impact investment organization whose mission is to grow viable businesses that generate sustainable earnings or cost-savings for people with low incomes in Africa, Asia, and Latin America. Companies in developing economies often face financing constraints and lack sources of business advice. The GBF establishes innovative financing vehicles that provide long term, risk sharing capital to these businesses, while its not-for-profit component crafts incremental business advice programs to help strengthen companies’ operational fundamentals. Since 2011, The GBF’s first private investment fund has invested over $30M and conducted over 200 advisory projects with businesses that benefit 1.7 million people per year.
Over the course of their 25 year history, Calvert Impact Capital have raised more than $2 billion from over 18,000 investors to more than 520 mission-driven organizations across the U.S. and around the world.
- They have a 25-year track record of portfolio management with 100% repayment to all investors;
- Calvert Impact Capital raises capital from a diverse group of investors, including individuals, institutions, and financial advisors in amounts as low as $20 to over $20 million;
Calvert’s portfolio partners reach all 50 states plus DC and Puerto Rico, as well more than 100 countries and organize their portfolio across nine sectors: affordable housing, community development, education, environmental sustainability, health, microfinance, renewable energy, small business and sustainable agriculture.
In 2018, Calvert Impact Capital disbursed $100.4 million in new and renewed loans to 100 borrowers. Collectively, those 100 borrowers made nearly $4.7 billion in loans to their clients. In 2018, the portfolio partners collectively served over 72 million clients (60% women) and created or retained more than 500,000 jobs.
Renewal Funds provides an opportunity for investors to participate in the development of business at the forefront of social and environmental innovation. Renewal Funds invests in change by supporting businesses at the forefront of social and environmental innovation. They believe that there must be a fundamental reinvention of where and how capital is deployed. The Renewal Funds model is to deliver above market returns by investing in businesses in Canada and the US that provide the finest sustainability solutions.
Moore Ventures invests in innovative businesses that leverage scalable technology to solve some of the world’s largest environmental challenges to help mitigate climate change globally.
Alante is a venture capital fund investing in innovative companies that enable a resilient, sustainable future for apparel production and retail.
Over the past decade, clothing prices have hit record lows while production continues to soar, resulting in an exponential increase in environmental and social costs. The challenges of managing opaque supply chains have allowed for forced labor, unsafe working conditions and toxic dumping to be outcomes of the clothes we wear. Companies are actively developing and integrating new solutions to make the lifecycle of apparel safer, cleaner, more efficient and more sustainable.
Brand and consumer demand, alongside supply chain pressures, are rapidly driving a shift towards sustainable apparel. Alante partners with brands to understand their sustainability bottlenecks and requirements, informing our process to invest in companies that provide viable solutions.
Investing across the apparel industry into innovations in production, distribution, and waste recovery, we seek scalable solutions that leave lasting, positive impacts on people and the planet. At Alante, we bridge the gap between emerging technologies and apparel brands and retailers, helping to improve efficiency and resiliency across the $3.1tn textile and apparel industry.