Global Handbook of Impact Investing: Solving Global Problems Via Smarter Capital Markets Towards a More Sustainable Society

ISBN-13: 9781119690641 / Angielski / Twarda / 2020 / 1328 str.

R. Paul Herman; Elsa de Morais Sarmento

Spis treści

Foreword by Justin Rockefeller xxxi Acknowledgments xlv About the Contributors xlvii Acronyms and Abbreviations lxi Introduction 1 Chapter 1 Impact Investing: Innovation or Rebranding? 9 Haifa Ben Abid, MPhil Introduction 10 Methodology 11 Impact Investing: Clarifying the Concept 13 Types of Impact Investing: Financial-First versus Impact-First 15 Impact Investing: A Response to a Changing Investment Environment 18 Changing Demographics: Investment Practices Among Millennials 18 A Global, Multibillion-Dollar Market 20 Mechanisms for Institutionalization 21 Key Features of Impact Investing 22 Refining the "Good" Return: Financial and Social Considerations 24 Helping Investors "Walk the Walk": Aligning Mission, Values, and Investments 24 A Prudent Entrepreneurial Spirit: Experimentation and Mitigating Risks 25 Impact Investing: Leverage for Development? 25 Conclusion 28 References 29 Chapter 2 Investing for Impact: Socially Motivated Investors and Externalities 37 Raghavan Narayanan, MBA and Stoyan V. Tenev PhD Introduction 38 A Conceptual Framework for Socially Motivated Investment Behavior 39 Typology of Socially Motivated Investors 43 Impact Investing 52 Conclusion 56 References 58 Chapter 3 Place-Based Impact Investing: Local and Regional Assets for Local and Regional Impact in Globally Diversified Portfolios 61 Introduction 62 Targeting Impact Through Place-Based Impact Investing 66 Constructing Institutional Place-Based Impact Investing Portfolios 71 The Bay Area Model Equity Strategy 74 The US Community Investing Index, by the F. B. Heron Foundation 77 Creating Investable Opportunities for Sustainable and Resilient Communities Through Inclusive Community Engagement 81 Capital Stacks: Financing Local and Regional Projects 88 Global Examples of Place-Based Impact Investing Success 93 Final Remarks and Key Conclusions 98 References 99 Chapter 4 How to Invest in Human Capital: Measuring and Integrating Human Capital Valuation to Realize Higher-Impact Portfolios 103 R. Paul Herman, BSci and Kirstin Dougall, MFA Why Impact Investors Should Care About Human Capital Valuation 104 Methodology 105 Measuring the Contribution of Human Capital to Returns 106 Human Capital Valuation Methods 107 Investor Methods for Capturing Monetary HCV 109 The Heritage of Monetary Human Capital Valuation Methods 109 Investment Strategies Using Monetary HCV 110 Non-Monetary Human Capital Valuation for Impact Investors 111 Exemplary Ratings Systems That Feature Human Capital Valuation 111 Non-Monetary Human Capital Metrics That Impact Investors Can Use in Custom Analyses 112 Employee Participation 114 Incorporating Data from Human Resources Management Systems 115 Standards for Human Capital Valuation 115 Integrating Human Capital into the Investment Process 118 Examples of Human Capital Valuation Applied in Impact Investing 118 Examples: Monetary Human Capital Valuation in Action 119 Monetary HCV Example: Asian Company "BroadTek" Uses Human Capital Financial Statements to Calculate Returns on Workforce Investments 119 Monetary HCV Example: Global Technology Company Infosys Uses Present Value of Compensation Method to Calculate Returns on Workforce Investments 119 Example: Being a Global "Great Place to Work(r)" Creates Higher Growth 122 Non-Monetary HCV Example: Indian Company HCL Technologies' "Employees First, Customers Second" Initiative Leads to Higher Growth and Economic Resilience 123 Examples: Using Standards to Assess Whether Companies Value Human Capital 123 HCV Standards Example: How Novartis Used the "Social and Human Capital Protocol" to Calculate the Economic Value of Improving Health Across Africa 125 HCV Standards Example: French Automaker Groupe PSA Demonstrates How Human Capital Contributes to Their Value Chain Using the International Integrated Reporting Framework 125 HCV Standards Example: Managers of Australian Retirement Fund Assess and Adjust Holdings Using GRI Human Capital Guidelines 126 Stock Indexes and Funds Built on Human Capital Metrics 128 Looking Forward: New Human Capital Valuation Reporting Will Make Impact Investing Easier 130 An Investor's Action Plan for Human Capital Valuation 131 Conclusion 133 Further Reading for Impact Investors 134 References 135 Appendix 4.1: Experts Interviewed 141 Appendix 4.2: Human Capital Management Institute Monetary Human Capital Valuation Formulas 142 Appendix 4.3: Human Capital Valuation Ratings Systems 143 Appendix 4.4: Human Resource Metrics and Where to Find Them 146 Chapter 5 Leadership by Results for Impact Investors and Investees 147 Rajen Makhijani, MBA Introduction 148 The Impact Sector Underinvests in Leaders 151 The "Leadership by Results" Approach 154 Three Practical Frameworks and an Example 168 Translation of Goal Achievements into Returns on Investment 181 Conclusion 190 References 192 Chapter 6 Gender Lens Investing: Co-Creating Critical Knowledge to Build a Credible, Durable Field 195 Edward T. Jackson, OMC, EdD and Elsa de Morais Sarmento, MA Introduction 196 Gender Lens Investing: Evolving Definitions 198 A Professional Field with Visibility, Force, and Momentum 201 Building a Larger, More Robust Field: Five Scaling Strategies 202 Deepening the Empirical Knowledge Base: Four Themes 207 Constructing a GLI Research Agenda Through 2030 216 Impact Investing Community-University Research Partnerships 220 Final Remarks 223 References 225 Chapter 7 Investing with a Gender Lens: Uncovering Alpha Previously Overlooked 233 Kristin Hull, PhD Introduction 234 Gender Lens Investing: Definitions, History, and Potential for a Growing Movement 236 Factors Driving Investors to Adopt a Gender Lens 243 Female Asset Managers Outperforming 244 Women at the Top 246 Board Representation 247 Women Founders and Women-Led Startups 248 How Impact Investors Can Pursue Gender Investing 250 Gender Lens Cash Equivalents and Short-Term Notes 254 Gender Lens Public Fixed Income 254 Gender Lens Fixed Income 255 Gender Lens Private Debt 255 Gender Lens Public Equities 256 Gender Lens Global Equities 257 Gender Lens Private Equity 258 Startup Ventures with a Gender Lens 258 Private Equity and Venture Capital Funds 258 Fund of Funds 260 The Importance of an Investment Policy Statement for Gender Lens Investing 260 Conclusion 263 References 265 Appendix 7.1: Resources 271 Chapter 8 Gender Lens Investing in the African Context 273 Michael Z. Ngoasong, PhD and Richmond O. Lamptey, PhD Introduction 274 Methodology 276 Why Gender Lens Investing in Africa Matters 279 Adopting Gender Lens Investing 281 The Practice of Gender Lens Investing in Africa 283 Discussion 295 Conclusion 296 Recommendations 297 References 299 Chapter 9 The Evolution from Gender-Focused Microfinance to Gender Lens Investing in Latin America: The Case of Pro Mujer 303 Angélica Rotondaro, PhD, Maria Cavalcanti, MBA, MS and Carmen Correa, BS Introduction: Building the Business Case for Gender Lens Investing in Latin America 304 Gender Lens Investing in Latin America and Beyond: Backstage Highlights 306 Pro Mujer's Gender Lens Investing Process 310 Pro Mujer's Gender Lens Investing and Scorecard 314 Ilu Women's Empowerment Fund GLI Scorecard 316 Unite to Conquer: The Crucial Role of Partnerships for Leveraging Catalytic Capital for Gender Lens Investing in Latin America 319 Key Learnings and Recommendations 323 The Way Ahead 329 References 330 Chapter 10 Inclusive Investing: Impact Meets Diversity, Equity, and Inclusion 333 Julianne Zimmerman, MSci, Edward Dugger III, MPA-UP, and Shijiro Ochirbat, MBA, MPA Introduction: "DEI" Is Not an Asset Class 334 Aligning Purpose with Evidence and Practice 336 Inclusive Investing Methodology: Adapting the Scope 1, 2, 3 Approach to Assess Who Are the People in Your Portfolio? 343 Inclusive Investing in Practice: UNC Ventures 350 How to Begin: Determine What Is Material and Relevant 354 Conclusion 359 References 360 Appendix 10.1: Starting Examples of Communities of Practice and Knowledge-Sharing Platforms 366 Appendix 10.2: Additional Resources for Further Exploration 368 Chapter 11 Investing for Impact in Employee Retirement Plans 371 Megan E. Morrice, MBA Introduction 372 Retirement Plans Demand and Types 374 Regulation in the United States, United Kingdom, and European Union 380 Creating Successful Retirement Savings Plans 392 Benefits of Successful Sustainable Retirement Savings Plan 398 How a Retirement Plan Can Become More Sustainable 399 Get Educated on Sustainable Investing 400 Engage Employees Through Their Retirement Plans 400 Prepare for Inspired Incremental Change 401 Educate Participants with Managerial Support 402 Research and Prepare 402 Talk to Colleagues and Build Consensus 403 Identify Who to Approach 403 Approach with Potential Solutions 403 Conclusion 404 References 405 Appendix 11.1: Experts Interviewed 411 Chapter 12 Fossil-Fuel-Free Investing: Weaving a New Investment Paradigm 413 Umachander Balakumar, MSci Introduction 414 China: Lessons from the Biggest Polluter and Biggest Green Energy Market Maker 417 Metrics 419 Building a Fossil-Fuel-Free Portfolio 428 Private Equity (PE) 441 Hedge Funds 444 Commodities 446 Real Estate 448 Public Debt 449 Green Bonds 449 Cryptocurrency 451 Final Remarks 452 References 455 Appendix 12.1: Experts Interviewed 459 Appendix 12.2: Fossil-Fuel-Free Topics and Information 459 Chapter 13 The Role of Transition Finance Instruments in Bridging the Climate Finance Gap 461 Pauline Deschryver, MSci, MPA and Frederic de Mariz, PhD Introduction 462 An Overview of Green Finance 465 Green Bond Certification: Growing Diversity Toward Transparency and Integrity 469 Green Bond Issuances Are Not Large Enough for Most Investors 470 Lack of Standardization in the Green Bond Market Threatens Integrity of Label 471 Reputational Risks Scare off Issuers and Investors Alike 472 The Sustainable Finance Market Stands to Benefit from the Development of Transition Finance 473 Existing Frameworks for Transition Bonds 475 Issuance of Transition Bonds 482 Conclusion 490 References 491 Chapter 14 Social Impact Bonds: Promises and Results 499 Maria Basílio, PhD Introduction 500 Social Impact Bonds: Key Concepts 501 Expected Benefits and Reasons for Concern 505 The Theory Behind 506 Successes and Failures of SIBs 509 The Role of Impact Bonds in Sustainable Development Goals 511 Development Impact Bonds 512 Environmental Impact Bonds 514 Conclusion 518 References 520 Chapter 15 Climate and Money: Dealing with "Impact Washing" and a Case for Climate Impact Bonds 525 Jyotsna Puri, PhD, Aemal Khan, MA, and Solomon Asfaw, PhD Introduction 526 Impact Investing: Definition and Measurement Challenges 529 Social Impact Bonds 533 The Case for Climate Impact Bonds: A Hypothetical Example 534 Conclusions and Implications 547 References 550 Appendix 15.1: Definitions of Terms Used in the Impact Investing Industry 553 Chapter 16 Measuring and Evaluating Social Impact in Impact Investing: An Overview of the Main Available Standards and Methods 555 Ana Pimenta, MEcon and Elsa de Morais Sarmento, MA Introduction 556 The Importance of Measurement in Impact Investing 559 A Brief Overview of the Evolution and Current Status of Impact Measurement in Impact Investing 569 Frameworks for Measuring and Reporting on Impact 575 Standards 595 A Selection of Methods for Impact Measurement 613 An Integrated Approach for Impact Measurement 634 Conclusion 642 References 644 Appendix 16.1: Definitions and Terminology 655 Appendix 16.2: Global, National, and Company Level Initiatives, Frameworks, and Toolkits 661 Chapter 17 Impact Measurement and Management Techniques to Achieve Powerful Results 667 Jane Reisman, PhD and Veronica Olazabal, MCRS Introduction 668 Methodology 670 Conclusion 691 References 694 Chapter 18 Transformative Evaluation and Impact Investing: A Fruitful Marriage 697 Courtney Bolinson, MS and Donna M. Mertens, PhD Introduction 698 Methodology 702 The Transformative Methodological Framework 703 Application to Impact Investing 714 Village Capital and Peer-Selected Investment 721 Global Agri-Development Company and the Absence of a Transformative Framework 725 Conclusion 729 References 732 Chapter 19 Geospatial Analysis of Targeting of World Bank's Development Assistance in Mexico 735 Mario Negre, PhD, Dr. Hannes Öhler, PhD, and ?eljko Bogetic´, PhD Introduction 736 Background and Context 739 Data and Methodology 741 Empirical Results 744 Regression Results 751 Conclusion 754 References 757 Chapter 20 Evaluating the Impact of Portfolio Allocations to Large Firms Along the Value Chain to Develop Small and Medium-Sized Enterprises 761 Maximilian Foedinger, MBA, MPA and Elsa de Morais Sarmento, MA Introduction 762 Value Chains and Small and Medium Enterprises 765 Best Practices for Impact Investors 782 Approach and Principles Underlying the Development of the EBRD Methodology 786 Development of the Methodology 787 Assessment of Results 797 Final Remarks 801 References 804 Appendix 20.1: Details on Indicators Used 808 Appendix 20.2: Impact Assessment Draft Questionnaire for Large Firms 817 Appendix 20.3: Impact Assessment Draft Questionnaire for SMEs 822 Chapter 21 Two Decades of Front-Line Impact Investing 827 Jean-Philippe de Schrevel, MBA Introduction 828 Five Pillars of Impact Investing Best Practice 830 Conclusion 840 References 840 Chapter 22 China's Rapidly Evolving Practice of Impact Investing: A Critical Perspective 843 Zhao Jianbo, PhD Introduction 844 Literature Review: Defining the Spectrum of Impact Investing 846 The Practice of Impact Investing in China: An Overview 850 Targeted Poverty Alleviation Needs Social Capital 855 The Maturing Market for Impact Investing in China 857 Challenges to Impact Investment in China 859 Discussion 860 Conclusion 863 References 864 Appendix 22.1: List of Interviewees 867 Chapter 23 Impact Investing Through Corporate Social Responsibility: The Indian Experience 869 Tanvi Kiran, PhD and Shivam Dhawan, MA Introduction 870 Data and Methods 872 Overview of the Corporate Social Responsibility Model in India 872 Focal Areas of Impact Investment Under CSR 872 Findings 878 Parameter 1: Magnitude of Impact Investment: Total CSR Spent on Developmental Activities 878 Parameter 2: Nature of Impact Investment: Sectoral Breakup of CSR Expenditure in India 878 Parameter 3: Extent of Impact Investment in Terms of Geographical Distribution of CSR Expenditure in India 889 Parameter 4: Type of Impact Investment in Terms of CSR Spending by Public Sector and Non-Public Sector Undertakings 890 Discussion 892 Key Recommendations 896 References 897 Chapter 24 What Drives Impact Investors? Benchmarking Developed and Developing Countries 901 Robin Kipfer, MSci Introduction 902 Methodology 904 Literature Review 906 Extrinsic Drivers for Impact Investments 909 Intrinsic Drivers for Impact Investments 911 Findings 913 India 913 Finland 914 Public Policy 916 The Importance of Capital Providers 917 Discussion 921 Conclusion 923 References 924 Appendix 24.1: Experts Interviewed 927 Chapter 25 Understanding the Demand for Impact Investments: Insights from the Italian Market 929 Alessandro Rizzello, PhD, Elisabetta Scognamiglio, PhD, Ludovica Testa, LM, and Lorenzo Liotta, LLM Introduction 930 Methodology 933 Startup Venture Financing and Impact Investing: An Overview 934 Findings 937 Impact Investment Readiness Scoring 946 Conclusion 948 References 951 Appendix 25.1: Questionnaires 954 Appendix 25.2: Scoring Results 961 Appendix 25.3: Detailed Scoring Frameworks 963 Chapter 26 The Importance of Scale in Social Enterprises: The Indian Case 965 Vikram Raman, CA, MBA Introduction 966 Social Enterprises and Requirements for Achieving Scale 968 Social Enterprises: Characteristics and Social and Economic Contributions 969 Factors That Influence a Social Enterprises Ability to Scale 970 Internal Factors That Influence Scaling 971 External Factors That Influence Scaling 978 Partnering with the Ideal Investor for Financing 988 Scaling Responsibly 996 Case Studies 1002 Scaling Metrics 1011 Checklist for Social Enterprises Looking for Scale 1015 Conclusion 1022 References 1024 Appendix 26.1: Experts Interviewed 1030 Chapter 27 The Role of the Entrepreneurial University and Engaged Scholarship in Impact Investing Capacity Building 1031 Richard T Harrison, PhD and Suwen Chen MBA, MSci Introduction 1032 The Entrepreneurial University 1034 The Role of an Entrepreneurial University 1037 Three Missions of an Entrepreneurial University in Impact Investing 1040 From Top-Down to Bottom-Up 1050 Recognition of the Boundary of a University's Intervention 1052 Conclusion 1052 References 1053 Chapter 28 A Road Map for Implementing Impact Investing: The Case of Multinational Companies 1061 Filipa Pires de Almeida, MSc and Marta Bicho, PhD Introduction 1062 Methodology 1063 Impact Investing 1065 Company Profiles 1067 Findings on Impact Investing Strategies 1074 A Road Map for Impact Investing 1083 Conclusion 1087 References 1088 Appendix 28.1: Impact Investment Profiles 1093 Underlying Conditions 1094 Underlying Resources 1099 Impact Investing 1102 Appendix 28.2: Impact Investing Instruments 1107 Chapter 29 Impact Investing and European Wealth Managers: Why Impact Investing Will Go Mainstream and Evolve to Suit European Investors 1123 Trang Fernandez-Leenknecht, CAIA, LLM Introduction 1124 MiFID II: A Growth-Driver for Impact Investing 1128 Assessing "Complex" Suitable Products 1130 Integrating Impact Investing into Investment Funds 1132 Developing Impact Investing to Suit the Retail Market 1135 Generalizing Impact Investing to a Mainstream Scale 1137 The Impact Report: A Protection Tool for the Investor 1139 Overview in Selected Countries 1140 France: Innovative "90/10 Solidarity" Products 1142 Switzerland: From Institutional to Individual Pension Investors 1144 Considerations for the Future 1147 Conclusion and Next Steps 1151 References 1153 Chapter 30 Fintech for Impact: How Can Financial Innovation Advance Inclusion? 1159 Frederic de Mariz, PhD Introduction 1160 The Promise of Fintech: Innovation with a Purpose 1161 What Are the Benefits and Limits of Financial Inclusion? 1167 Within Fintech, Electronic Payments Are an Entry Point for Financial Inclusion 1172 The Drivers of Financial Inclusion: The Quality Dimension 1178 Can Fintech Enable More Impact Investing and Support SDGs? 1183 Conclusion 1185 References 1186 Index 1193

O autorze

ELSA DE MORAIS SARMENTO is an Associate Researcher at NOVAFRICA at Nova Business School of Management and Economics. She co-edited The Emerald Handbook of Public Private Partnerships in Developing and Emerging Economies. R. PAUL HERMAN is CEO of HIP (Human Impact + Profit) Investor Ratings and Portfolios and has served as faculty at business schools around the world. He is author of The HIP Investor: Make Bigger Profits by Building a Better World.