Impact investing refers to investments that are done with the intention of creating social and environmental good. It means that at the core of it, you need to have that social change and environmental change in a positive way, to happen with that investment.
So, just like any other market, you need the supply side of the capital. You need the demand side of capital. You need platforms for them to come together. And you need structures to come together.… I came out of Smith [College] for my undergraduateandjoinedMorgan Stanley. You have to remember, in those days, there were very few women in Wall Street, let alone anyone from Bangladesh, where I’m originally from. Then I went and joined this bank called Grameen Bank [in Bangladesh], which eventually got a Nobel Prize. Grameen Bank was doing this whole practice of microfinance: giving very small loans to rural women to start up their business. This is back in 1991-92.… Later, I started my first company, which was a global marketplace for handmade goods. I grew it and sold it to National Geographic. One of the big lessons for me there was how difficult it was to have a company that had a social side. The investor didn’t care about the social side.
Because, if you think about it, whatdidMiltonFriedmansay? Milton Friedman said, basically, as a company, your task is to maximise profit. That’s what we are taught. But it is really not about maximising profit. It’s actually maximising value. And part of the value is what good you’re doing to society.
From “Why Impact Investing Needs to Go Mainstream”