Why Impact?

What is impact?

Impact is the positive effect that we're having on people and the planet through our investments and through our decisions as members of the teams or leaders of businesses.

What is ESG and impact investment?

• ESg investment is an investment that seeks to achieve impact as well as profit, but doesn't measure it. ESG investment as of 2013 counted about $10 trillion USD. Today it is over $40 trillion USD.
• Impact investment is investment that has the same intention as ESG, but measures its impact rigorously. Today, it's counts for a trillion dollars. 

Why is the world moving in the direction of impact?

The values of consumers and of talent have been changing. 

• Consumers are shifting away from the products of harmful companies to companies that do less harm, or do good.
• Talent is refusing to work for harmful companies, preferring to work for companies that bring solutions rather than create environmental or social problems.
• Businesses understand that, for example, if they continue polluting or using child labor, they will lose consumers, talent and investors. Opposition to company damage is now breaking into the open at shareholders meetings. 

How does impact converge with leaps in technology?

• Leaps in technology, through artificial intelligence, machine learning and augmented reality enables us to deliver impact that improves lives.
• Technology and big data enables us to measure in a granular way. For example, the impacts that companies create through their operations on the environment, or through the employment practices, products and people. 

What kind of comparable information do we need from companies?

1. Environmental damage
2. Employment impact (measuring diversity, differences in advancement of ethnic and gender groups, differences in pay)
3. Product impacts (impacts on health and the environment)

What role can the government play?

If we want to have comparable information about the different impacts of companies, then we need governments mandating it. The Biden administration, the EU and national governments will now hopefully begin to require companies to publish impact weighted accounts.

What role can asset managers and consumers play in bringing about change?

• We should require asset managers to ensure companies publish their data and to push governments to standardise it.
• We, as consumers, can encourage impact transparency by shifting our consumption away from the companies that are doing harm to those that are doing good. Companies will then realise that putting accurate information in the market about their impact is the best thing for them to do.