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?