John McLeod, former Principal and Executive Director of Goldman Sachs JBWere, author and independent consultant and researcher for the Philanthropic Services team at JBWere, facilitated our seminar entitled ‘Impact Investing Seminar: Revolutionising capital markets for greater societal gains’ on Thursday 9 October 2014 in Melbourne. Held in partnership with National Australia Bank as part of our Sustainability Leadership Series, the seminar brought together experts from various fields, discussing the challenges and opportunities associated with this innovative way to invest capital for social and/or environmental benefits as well as financial returns. For more information about this seminar and the UNAA Sustainability Leadership Series please visit www.unaavictoria.org.au/education-advocacy/masterclasses/

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UNITED NATIONS ASSOC. OF AUST. (VIC) IMPACT INVESTMING SEMINAR
JOHN MCLEOD JBWERE OCTOBER 2014

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Difficulties with the traditional nfp funding model
•Reliant on short term support from Government and philanthropy
•The size of these available funding pies is limited
•No guarantee of sustainability makes it difficult to focus on long term solutions
•We want them to run like businesses but fund them like charities
Demand
Funding Gap
Unmet Need / Lost Opportunity
Gov’t Financing

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Sources: Global Sustainable Investment Alliance, Global Sustainable Investment Review 2012, 2013; www.unpri.org.
Traditional assets are starting to be managed with ESG strategies

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An organisational spectrum
Purely Social & Environmental
Purely Financial

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Provide capital
•Transactions currently tend to be private debt or equity investments
•We expect more publicly traded investment opportunities will emerge as the market matures
Expect financial returns
•The investment should be expected to return at least nominal principal
–Grants and donations should be excluded
–Market-rate returns in scope
Business designed with intent…
•The investment should be designed with intent to make a positive impact
•This differentiates impact investments from investments that have unintentional positive social consequences
… to generate positive social and/or environmental impact
•Positive social and/or environmental impact should be part of the stated business strategy and should be measured as part of the success of the investment
Investments Intended to Create Positive Social Impact with Financial Return
What Is Impact Investing?
Courtesy of the Rockefeller Foundation

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Global impact funds, investment by sector during 2011
Source: Y Saltuk, A Bouri & G Leung, Insight into the Impact Investment Market: An in-depth analysis of investor perspectives and over 2,200 transactions, JP Morgan and the GIIN, 2011

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Number of impact investment funds globally, 1970–2012
Source: C Clark, J Emerson and B Thornley, A Market Emerges: The Six Dynamics of Impact Investing, The Impact Investor project, 2012

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Social Impact Bonds – early days but strong interest

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Growing options across sectors and asset classes
Source Rockefeller Philanthropy Advisors`

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The impediments to growing Impact Investing
in Australia are gradually being overcome
Source: Impact Australia Report and SVA