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A unique learning and networking event series in financial hubs across Europe, Asia and the US for investors and financial professionals. We help mobilize private capital for sustainable investment for more than 15 years.

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Courage to Change: But Is It Enough? Philippe Desfossés, CEO of ERAFP

Monday, 22 Jun 2015

Tags: nordic2015 impact investing fossil fuel sustainable agriculture climate change

Guest Blog Post written by Julie Tran during TBLI CONFERENCE™ NORDIC 2015. Views and opinions are that of the writer and are not the official views of TBLI CONFERENCE™. 

When looking at the state of our world concerning climate change, poverty, war and financial crisis, most people would agree with me that it’s time to change. Change in our mentalities, consumer habits, the way we work, connect and collaborate with each other. But is it enough? Or do we need to take bolder steps, especially those who manage the flow of monetary system?

During the past 5-10 years impact investment has grown fast where institutional investors like pension funds are playing a big role driving the movement forward. But there is no growth without challenges. From my attendance of the TBLI CONFERENCE™ NORDIC 2015 in Copenhagen, I had a chance to talk with Philippe Desfossés, CEO of the French public pension fund ERAFP, about the development of impact investment and the implications that it contains.

We started the conversation by talking about the challenges that institutional investors are facing at the moment.

Philippe told me that the first challenge is to survive the low return environment that many pension funds are facing. But despite the low return, he believed that the biggest challenge is to find the right balance between financing the transition of our economy to a more sustainable one, and investing in people who can speed up the transition. It’s also about daring to think out of the box and finding new ventures that have the potential to be disruptors. As incremental steps won’t be enough if we truly want to reach for a more sustainable future.

While I was listening to Philippe, I couldn’t help but think back to the “good old days” where I studied innovation from Copenhagen Business School, learning about disruptive versus incremental innovation. Some would argue that incremental innovations are the most effective, as not all disruptive innovations ended up revolutionising the targeted industry. I wondered; could Tesla’s new home-based battery disrupt the electricity market, decentralise the power and bring out the changes that we need? And preferably not only in wealthy developed countries but also in small remote villages in Africa, Latin America or Asia? If we look at this from a very long timespan, perhaps the most interesting questions are; how will Tesla’s innovation bring out a shift in other renewable energy industries? How would that influence the choices of impact investors who are making the decisions right now concerning which renewable industries to invest in?

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Scaling the Impact Investing Sector in Latin America - Perspectives from TBLI CONFERENCE™ LATIN AMERICA 2015

Monday, 22 Jun 2015

Tags: lam2015 impact investing sustainable investing responsible finance

Guest Blog Post written by Celina Lesta during TBLI CONFERENCE™ LATIN AMERICA 2015. Views and opinions are that of the writer and are not the official views of TBLI CONFERENCE™.

Impact investments have been taking place in different regions of the world for many years now. If financed, many social entrepreneurship, SMEs and NGOs could scale their impact providing solutions to social problems while creating profit.  What is the situation in Latin America? What is missing in the region for this trend to grow and be a concrete reality?

Around ten to fifteen years ago, investing in projects with high social and/or environmental measurable impact was something only NGOs and international organizations would do. Today, venture capital is entering the space because many of these kinds of projects are business oriented. They are meant to create profit while solving social and/or environmental problems.

Jane Hughes, from Global Innovative Finance, a member of the panel, shared the experience of the Social Impact Bonds (SIBs). As she explained, what started in the UK as a way of financing impact initiatives has been developing in the US market now for a few years.

Because they are not actually bonds, Hughes argues they are misnamed, “They are funds raised from private investors used to scale up the work of highly effective NGOs which are providing a social service relevant for the community.”

Governments repay the investors based on the success of the project.  This type of funding is based on the agreement of the indicators that will account for the success or failure of the project. Regarding regulations, as long as legalities are not in question, it does not need a special legal frame. The implementation of SIBs requires intermediate organizations to identify these high performance NGOs and walk with them during the scaling up process. Independent evaluators can also audit the results.

Patrick Watson, Director of Investment Advisory Services Group and Latin America Director of I-DEV International, had an interesting view of the of impact investments in Latin America. Based in Peru, his work is oriented to help global corporations, investors and SMEs in emerging markets do business together via profitable, high-impact partnerships, mainly in the Andean region.

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