Fi21 Highlights

On September 28th to 30th, Fi Impact Investing Forum celebrated its fourth edition. Over three days, through more than 18 keynotes, presentations and panel discussions, the global impact investing community met virtually at Fi21 to analyse the opportunities for impact investing in responding to the global challenges we face; meet and learn from inspiring impact investing leaders worldwide; and connect with other individuals and institutions working in the sector. Nearly 500 people and institutions from 38 different countries with an interest in impact investing participated in the event.

Fi21 featured top-level speakers such as Amit Bouri (GIIN), Philippe Zaouati (Mirova), Fabienne Michaux (UNDP SDG Impact), Margarita Albors (Social Nest Foundation), Edit Kiss (Mirova Natural Capital), Sarah Drinkwater (former Omidyar Network), Fernando Scodro (The ImPact), Inês Sequeira (Casa do Impacto), Johannes Weber (BMW Foundation Herbert Quandt) or Jeffrey Cyr (Raven Indigenous Capital Partners), among more than 30 international industry experts and inspirational speakers.

This year’s forum was structured in a more general day one and four tracks addressing the specific needs and interests of four investor profiles: Institutional Investors, Corporates, Individuals and Family Offices, and Philanthropic Institutions and Foundations, on day two and day three of the event. We are sharing here some highlights and key learnings from the forum.

Trust, conviction, and transparency are needed to take action towards a sustainable world

Some of the words more repeated during the forum were trust, conviction and transparency. In the words of keynote speaker Philippe Zaouati, CEO of Mirova, “I don’t believe concern can lead to a systematic change… trust and conviction can. Sustainable finance is at the heart of this new model, as it can bring trust between investors, asset managers, projects… with trust we can start to act”. These three elements are important to minimise impact washing, that as many of the speakers pointed out, is a big concern for those who are in the sustainable and impact industry and for those who are not in it yet.

To generate trust, convection and transparency there is a need for standardized impact measurement frameworks. However, it is important to realise that the frameworks should not only focus on the reporting aspect, but rather on helping actors in their decision-making processes. As Rob Zochowski, from Harvard Business School, expressed when referring to the Impact-Weighted Accounts methodology he presented at Fi21 “Impact-Weighted Accounts are monetised impact estimates from the stakeholders’ perspective, which can be used to better inform organisational and investor decision making”.

The need to manage the same concepts, frameworks and standards in the industry was also pointed out by the panel of impact investors composed of Sarah Drinkwater (former Omidyar), Jeffrey Cyr (Raven Indigenous Capital Partners), and Lauren Ferstandig (NatureVest), who agreed that it is very positive that there is a great deal of talk around ESG investing and impact investing, but that at the same time there is a missed opportunity for people who have good intentions to allocate their money towards impact investing due the lack of in-depth knowledge and standardization.

Institutional investors and corporates play a key role in the sector

Institutional investors are called to be involved in the impact investing industry because they have the special characteristic of working with a focus on the long term. Financial performance in the long term is crucial for them, so they are key actors to invest in the future of society, work for all, and work for the planet. They need to allocate capital today, for the future of all tomorrow.

Corporates also have an important role in accelerating the mobilisation of capital towards impact investing, not only by financing strategies or corporate venturing, but also by joining together with other types of investors. For that to happen it is important to move from a CSR approach, which is a cost approach, towards an investment approach. The impact investing industry will greatly benefit from more corporates making that transition.

As explained by Ana Sainz, General Director of Fundación SERES: “Until now, the economic system has functioned on the basis of risk management. Now it’s necessary to take a step forward, positioning impact at the centre of the economic system. We have to change from a risk management model to a system based on promoting social impact and generating social value and economic value. The pandemic has shown us that we have a committed business fabric, which is committed and takes action. We put the focus on people and we are aware that, in this moment of change, in which we live, the best positioned will not be the strongest, but the most agile, those who know how to be pioneers and embrace change”.

New generations for impact

Impact investing is a natural fit for family offices, because they benefit from a unique flexibility in making significant investments without the financial return requirements placed on venture capital firms and other institutional investors. That’s not to say that they all accept below market return rates, but family offices tend to have lean structures for decision-making that can be brought into play to evaluate new, creative financing approaches.

More and more, younger generations are pursuing to align their family assets with their family values and working to inspire family members around impact investing. In that sense, it was very interesting hearing first-hand the experience of younger impact investor Fernando Scodro (The ImPact), who has helped transition his family’s traditional investment portfolio towards impact investing through building credibility and family consensus around the matter and joining other families which are also on the path of impact investing to share knowledge and experiences: “Our goal is to have everything that we own somehow embedded with the values we share as a family and we have selected five topics that we want to see reflected in the family office: access to healthcare, access to education, climate change, gender equality and better food”.

The role of the venture philanthropy

For Carolina Suarez, CEO of Latimpacto, “Foundations have unique assets which differentiate them from other actors in the impact ecosystem and make them more attractive”. Patient capital and flexibility allows foundations to finance early-stage social purpose organisations. Foundations are also in a better position to take risks that the public sector cannot assume due to its fiduciary obligations to protect public assets, or the private sector are not willing to take since they must ensure financial results.

The closing panel “Experiences of foundations and philanthropic institutions doing SRI and impact investing”, with Inês Sequeira, Founder and Director of Casa do Impacto, Rosa Madera, Founder and CEO in Empatthy, and Nathalie Nebelius, Member Engagement Manager at Toniic, highlighted the important role play by foundations as exemplary investors, catalytic capital investors, intermediary developers and network builders.

As the different sessions at Fi Annual Forum have shown, a lot has been gained in mobilising capital towards impact. However, there is still much to be done to position impact investing as the leading form of investment. Taking action on that account implies a paradigm shift for investors and managers, which requires commitment, reflexive capacity, and the ability to innovate to create financial vehicles and products that generate a financial return while creating a better future for all.

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