Impact Investing

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Nick Beim begins the discussion by offering a clear definition as to what exactly “Impact Investing” is. He says it is, “investing that has the intention to have a positive social impact in addition to generating a financial return.”

Matthew Bishop, the Globalization Editor of the Economist, sees that the world is at an inflection point where the money people are investing with start to move either into pure impact investing, or at least to values aligned with investing looking to its social impact. For Bishop, it is technology that has allowed the evolution of humans to think about higher goals, including our social impact. We are going from a 20th century mindset of investment and return, this two dimensional was of thinking, to a three dimensional thought process that includes impact. Now, investors can think about, “how do we allocate money that improves society and the environment.”

Neil Blumenthal, Co-Founder of Warby Parker, explained the company's B-Corp status, which makes the company straddling that line between for profit and non profit. Blumenthal accurately described his company as, “for purpose.” In order to be a certified B Corp, one needs to pass through a rigorous assessment protocol that shows how the company is impacting its own employees, environment, and surrounding community. Blumenthal notes that this both makes investors more emotionally invested in the company, as well as attracts top talent. "It’s all about talent, and talent cares about mission driven companies.”

Millennials are the first generation to enter the workforce with unlimited information their entire life. So, when they make the decision about which company to work for, the values of the company become far more important than they ever have been in the past. And in fact, even though they are a “for purpose” company, in the long run they generate more profit over time. What is most interesting about Warby Parker, is that what initially draws people to purchase their product is not their social mission. In descending order, people look at design, price, quality, service level, then last but not least the social mission. But because there is such a strong mission, and people are very inclined to tell their friends and generate sales through word of mouth. Mathew Bishop noted that, "We will see a real change in the next 10 years, people aren’t going to put up with organizations that are substandard and making the world worse.”

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