NEW YORK, May 24, 2023 /PRNewswire/ — The U.S. Impact Investing Alliance (“the Alliance”), an organization dedicated to building the impact investing ecosystem, today published “Impact at Work: An Examination of Corporate Impact Investing Strategies and Their Durability.” The report, which was produced with support from the Robert Wood Johnson Foundation, is available at https://impinvalliance.org/impact-at-work.
“Recent social and environmental crises have catalyzed a widespread rethinking of the ideal role of major institutions in supporting the public good,” said Fran Seegull, President of the U.S. Impact Investing Alliance. “For corporations in particular, this rethinking has manifested in bold commitments to invest in racial equity, community development and climate initiatives. These investments are increasingly leveraging impact investing tools over traditional grantmaking tools, but more transparency, accountability and sharing of best practices is still needed.”
“Impact at Work” builds on two earlier reports published by the Alliance examining how different investor groups and institutions can leverage the ever-expanding toolkit advanced by impact investors to generate positive social, economic and environmental outcomes. These reports include “Impact in the Balance” (2022), which looks at how foundations have adopted a broad range of tools for advancing impact alongside traditional grantmaking, and “Impact in Place” (2021), which was commissioned by the Federal Reserve Bank of New York to explore emerging trends in community investing and how to spur more economic development across local Main Streets.
The latest entry in the Alliance’s research series was inspired by the corporate response to the unprecedented crises of 2020, including the devastating impacts of the COVID-19 pandemic combined with widespread economic uncertainty and concerns about racial injustice. This confluence of crises led many governments, philanthropies and companies to reconsider their accountability to workers, communities and society as a whole. Many corporations responded with bold commitments to invest in racial equity, community economic development and climate initiatives. Given concerns about whether these commitments are built on authenticity and long-term thinking, “Impact at Work” explores the durability of corporate impact investing strategies.
The report provides an overview of the current state of corporate impact investing, with a focus on the best practices and opportunities for companies to develop durable strategies that advance social, economic, and environmental outcomes in line with their business’ priorities.
The report also highlights several recommendations for companies seeking to start or deepen their impact investing efforts, such as:
Build champions early. Committed corporate leadership and board support are critical to the launch and continuation of a successful impact investing strategy.
Leverage existing structures. Strategies that build on existing business lines, priorities and practices can lead to more seamless alignment, buy-in and longevity across corporate teams.
Prioritize investment expertise. Effective strategies require the right teams with the appropriate investment expertise to source, diligence and manage investments.
Tie impact to strategy and/or financial return. Durability is most apparent with impact investment strategies that generate strong financial returns and/or clearly align with strategic value for the business.
Develop an accountability strategy. Transparency, authenticity and ultimately, accountability, can drive durability and credibility. Corporates should consider how they will track and disclose their progress to stakeholders when building strategies.
“The magnitude of challenges we face means we need all hands on deck, and it is encouraging to see a broader group of institutions mobilize their capital for impact,” said Kimberlee Cornett, Director of Impact Investments at the Robert Wood Johnson Foundation. “It’s our job as impact investors to share best practices and push for accountability to ensure companies and others entering this space are leveraging successful, durable strategies to drive real impact on the ground.”
“Companies are increasingly exploring ways to maximize the positive impact of their investments on society, their stakeholders and the planet,” said Amit Bouri, CEO and Co-Founder of the Global Impact Investing Network (GIIN). “By partnering with impact investors and employing industry best practices, companies will unlock more ways to put their own assets to work and deliver stronger impact throughout their business.”
“Americans expect companies to serve their stakeholders, particularly their workers, and they expect these efforts to be authentic and lasting. The good news is that research shows that companies who prioritize stakeholders also outperform their peers in the market,” said Alison Omens, Chief Strategy Officer of JUST Capital. “This report highlights the opportunities for corporations to be transparent, invest in their stakeholders and catalyze a race to the top.”
Through this report, the Alliance seeks to capture an important trend around corporate impact investing and generate further conversations around the need for long-term, authentic engagement from companies in leveraging their capital for impact.
About the U.S. Impact Investing Alliance
The U.S. Impact Investing Alliance is an organization dedicated to building the impact investing ecosystem by bridging market gaps and addressing shared challenges. The Alliance’s long-term vision is to place measurable social, economic and environmental impact alongside financial return and risk at the center of every investment decision. For more information, please visit www.impinvalliance.org.
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SOURCE U.S. Impact Investing Alliance