According
to the Global Impact Investment Network (GIIN), impact investments are
investments made with the intention to generate positive, measurable social and
environmental impact alongside a financial return. Depending on investors'
strategic goals, impact investment can be made in both emerging and developed markets,
and target a range of returns from below market to market rate. Impact investors
provide capital to address the world’s most pressing challenges in sectors such
as sustainable agriculture, renewable energy, conservation, microfinance, and
affordable and accessible basic services including housing, healthcare, and
education.
In
the Philippines, impact investing is gradually gaining momentum with several
non-government organizations actively pursuing it. NGOs such as Peace and Equity Holdings Inc. which
focuses on funding social enterprises in their early growth stage are leading
the impact investing movement in the country. More and more impact investors in
technology are coming in such as Ideaspace which is backed up by PLDT- Smart;
and Kickstart whose supporters include Globe Telecom. Many start-ups are built
on the noble idea of doing good to the people while at the same time earning
profitably to sustain its own operations.
The Philippines is a country that never lacks good Samaritans- high net
worth individuals and families who have vast wealth and excess funds, and want
to create social impact by investing on sustainable business ideas. They are
the so-called “angel investors”- the business do- gooders who want to give back
part of what they have accumulated while at the same time earning a sum for
their money.
The socio-economic landscape of the country makes it conducive for both
local and international impact investors. Poverty, malnutrition, illiteracy,
crime, injustice and other social ills need considerable investment of
resources if we are to solve them. Environmental problems, and natural and
man-made disasters occur on a regular basis which underscore the need for
investors who are willing to put their money to alleviate people’s conditions
(for a minimal return). Impact investing in the country can attain the same
rate and tempo of venture capital funding activities as long as there are those
who are committed to helping the poor and marginalized.
But there are also entrepreneurs who are wary of impact investing
because it takes more than just the availability of funds and resources. Good
intention alone is not enough. Impact investing requires massive and sustained
commitment of a business entity to keep it on track in pursuing its objectives.
Start-ups may find it difficult to sustain its operations, and might be forced
or tempted to go back to mainstream business venture driven solely by profit
instead of looking at social and environmental benefits.
Some observers say that it is difficult to find real impact investors.
Others comment that it is hard to distinguish them especially in developing
countries like the Philippines where most businesses are fiercely competing
with each other for market share. For me, impact investing is a trend that will
continue as people become more connected, aware and informed of what private
entities stand for. People are bound to support those whom they think have the
capacity and the will to do good for the society.
