The below article is a report on the GSC February webinar, “Social Investment: Profit with Purpose”
To view the webinar recording: [button color=”blue” size=”small” link=”http://gscouncil.org/social-investment-profit-with-purpose-part-1/” target=”blank” ]CLICK HERE[/button]
by Cori Zaccagnino
This was the first in a series of global meetings on social investment.
Eme Essien Lore from the Rockefeller Foundation, Abhilash Mudaliar from Global Impact Investing Network (GIIN), and Karen A. Morris a strategy and innovation consultant were panelists who analyzed the meaning of social investment and its trends.
According to Thompson Reuters, twelve percent of the total of $25.3 trillion in managed portfolios is now being managed under principles of socially responsible investment. With such a high percentage being directed toward socially responsible investment, let’s analyze how this is defined and what are the concepts involved.
Socially responsible investing is a strategy that seeks to consider financial and nonfinancial metrics. So, investing has become more than just maximizing profits; it is about optimizing returns among social and environmental values or dimensions.
In partnership with J.P. Morgan, GIIN conducted research that “aim[ed] to capture and represent…impact investors’ perceptions of the state of the market as well as performance of their portfolios.” Abilash Mudaliar presented insight into the state of the market for social investment. He discussed the performance expectations the financial and nonfinancial side of social investing as well as measurement metrics. Despite the challenges of social investment the survey analysis shows that there has been progress made within the survey’s indicators for market growth.
In the face of the market changes in the global economy, an increasing number of traditional investors are allocating bigger portions of their portfolio to social investment. According to Eme Essien Lore these reasons include diversification of risk, scaled business models, the alignment of values and decisions of capital allocation by high net worth individuals and the trend toward corporate social responsibility (CSR).
The top sources of capital raising by fund managers are high net worth individuals and development financial institutions. However, as the understanding behind the meaning of social investment increases across sectors and the measurement of performance is refined the presenters believe that more money will be directed toward strategies and philosophies of social investment.
[author image=”http://gscouncil.org/main/wp-content/uploads/2013/04/14ed6ed.jpg” ]Cori Zaccagnino is an intern at the Global Sourcing Council. She has done business and strategy development for an international organization working to increase women’s literacy throughout Africa. She is currently working to expand the operational capacity of an international advocacy and human rights organization. She holds a Master’s degree in International Development and Peacebuilding from New York University.[/author]