Over the past five decades the world has changed with an unprecedented pace. Humanity has been able to achieve milestones and do inventions that were a dream few centuries ago. It has also given birth to some of the greatest challenges that the world faces today. Issues such as refugee crisis, climate change, air pollution, choking oceans, depleting non-renewable energy resources, world hunger problem, corrosive income inequality, lack of quality education and healthcare present a huge risk to the future of the world while also presenting an opportunity to be creative and leverage technology like never before to create impact and advance the human race on its unique path.
On a different angle, there has been a debate about the effectiveness of outcomes of impact investing. Achieving sustainable developmental goals (SDGs) by 2030 requires $5-$7 trillion annually.
A great strategy to go about it is focusing on the success stories about social, political, health and economic upliftment of the communities across the world and take these case studies as a benchmark to create processes and plans for all the funds which bring best of all the worlds for humanity.
To overcome all the muddling challenges about impact investing, impact investors are suggested to take the following measures as per Stanford Social Innovation Review:
- They should anchor impact investing to market returns, because if not done so, the risks of misallocations are serious. Impact investors should not surrender to concessionary returns and have a fiduciary-like focus on achieving market returns.
- They should reboot impact measurement standards, as sometimes it is difficult to test whether a change in an indicator can be reliably attributed to an investment or company.
- Lastly, they should leverage the power of big business enterprises, which are already out there to handle such complex undertakings.
We at Sumeru Ventures believe that impact is about sustainable development. Sustainable development is possible only with sustainable ethics where trust and transparency are indispensable parts of the business enterprises. This is the only mantra for sustained development of business and inclusive growth of the society. In conclusion, Impact Investing can help only if properly harnessed.