While it wasn’t called impact investing until fairly recently, it has been a part of the investment world for some time. There always have been socially conscious individuals who wanted their money to speak for them, and for their financial holdings to reflect their philanthropic beliefs. With information becoming more available and the world getting a little smaller, investing based on socially responsible ideals is getting easier. Impact isn’t restricted to one industry or one type of investment. A lot of companies are realizing that doing good in the world may be good for them as well. Here are some of the ones Falcons Rock Impact Investments thinks are doing great jobs, and we encourage prospective investors to look for organizations like these in which to invest.
Tech Giants and Impact Investing The big four tech companies — Google, Apple, Facebook and Amazon — might not be in the wealth-management industry just yet, but they’re well-known, and many people trust them. More than half of high net-worth investors (with a net worth of $1 million or more) out of those surveyed would trust one of these companies with their money. In particular, high net-worth investors under age 40 would be inclined to use one of the four.
Tech firms like these are in good positions to change the impact investing industry. While they’re unlikely to replace traditional investing completely, their partnership or collaboration with more traditional firms could present changes to the industry that give impact investors more nuanced choices. Their innovations give them speed and agility in the digital arena, and they have the potential to be more transparent than traditional advisors, and personalize their services because of the data they collect. What also sets tech giants apart in the industry are their ties to developments in artificial intelligence. The impact investing industry, including Falcons Rock Impact Investments, makes use of robo advisors to give their investors control over their portfolios and efficiency in their investing; the work of tech companies can make this process even better.
UBS and the Rise Fund The world’s biggest private bank wanted to appeal to its wealthy clients’ interest in combining philanthropy and moneymaking, so it raised $325 million for a private equity impact investment fund.
The Rise Fund, backed by co-founder Bono and managed by Bill McGlashan, aims to achieve competitive financial and social returns and outcomes. The fund is small by UBS standards — about $2 billion versus the roughly $2.1 trillion USD in invested assets they manage — but it’s a significant amount of money within the impact investment industry. There aren’t as many opportunities as wealthy investors would like, and this is a move in the right direction; if opportunities are created, wealthy impact investors will move their money into them.
The Rise Fund is one of the many planned impact investments UBS will offer to clients. The fund will focus on seven different socially responsible arenas: education; energy; food and agriculture; financial services; growth infrastructure; health care; and technology, media and communications. The variety of investments it will make available will not only ensure money is getting where it needs to go, but other institutions will see it works, and start offering impact investing opportunities of their own.
The Pacific Investment Readiness Pilot Impact investors from all over the world can help businesses in the Pacific recover from disasters and expand. The Difference Incubator (TDi), in partnership with the Department of Foreign Affairs and Trade, facilitated securing a $656,000 investment from impact investors to help out Tanna Coffee, a Vanuatu coffee producer. Tanna Coffee grows, farms, processes, roasts and distributes premium single-origin coffee, but it was hit hard two years ago by tropical cyclone Pam. With the money from the investment, the company rebuilt its operation, produced a significant harvest, and has ambitious plans to increase production and wages, develop innovative and sustainable farming methods, and develop land for 200 working farmers to grow coffee. These developments would improve the company’s impact on the lifestyles of the farmers, their families, and their community, and improve Vanuatu’s economy.
Traditional investors might look at businesses in the Pacific and see challenges, but TDi looks for opportunities. It selects businesses that have the greatest potential to deliver returns while having positive social and environmental impacts. Through impact investing, sustainable economies can be produced and create a better world for everyone, whether that means an entire nation that doesn’t have to rely on foreign aid, or a single farmer who can send his children to a good school.
Salesforce One of the cloud computing giants already was changing how corporate philanthropy worked. Regardless of how well it does, it’s committed to making sure at least 1 percent of its time, product or equity gets to charity, regardless of how well it’s doing; the company recently formalized the process so other businesses can do the same thing. It also met a promise to go carbon-neutral, which didn’t need to be fulfilled for over 30 years. The company’s current plan is to coordinate with Salesforce Ventures to combine corporate capital and positive social progress.
This resulted in the launch of a $50 million impact investment fund designed to invest in social enterprises using its cloud-based customer relationship management platform in innovative ways. This money will be awarded to candidates within the next two years, based on their work in workplace development, equality, sustainability and the social sector. The company is looking to not only reward new organizations, but increase its returns, develop advancements, and help Salesforce expand into new markets to maximize the amount of impact its investing can do.
Transforming Industries With Falcons Rock Impact Investments You don’t have to be an international company with worldwide holdings to take steps to make improvements to the world. In fact, it’s investors like you who can help make the biggest changes. Falcons Rock Impact Investments can help socially conscious investors put their money toward causes in which they believe. Money talks, and when companies see where money is flowing, they’ll listen. We can help you find the right investment vehicles for your beliefs, goals, risk tolerance and financial situation. Start learning more about how our impact investing process works today.