“Tonight we move forward a new idea, that capital is used for meaning.” Naomi Smith reports from SOCAP/Europe.

Originally posted on the CSRwire website.

By Naomi Smith

“This impact investing space is kind of like the big bang,” says Brian Walsh, director of Liquidnet for Good. My first night at the SOCAP/Europe conference and Brian has summed up the 100+ page masters thesis I have just completed in these two words. As we stand together in the Beurs Van Berlage historic stock exchange in the centre of Amsterdam, surrounded by 650+ attendees from over 50 countries, I see exactly what Brian means. All around us are investors and entrepreneurs who share a common vision of a blended value approach to the way we should do business. Age old capitalist thinking in which profit maximization has stood as the cornerstone of purpose is being shaken up by this small yet rapidly growing industry of social business where financial returns are partnered with social and environmental impact.

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Impact investing is a hot topic, but Version 2.0 would improve the odds.

By Dr. Matthew Kiernan

“Impact Investing” is generating an enormous amount of “buzz” these days – even if it is talked about much more than it is practiced. It has become particularly popular among foundations, endowments and high net worth individual investors. While the precise meaning of the term is still being defined and debated, in essence, impact investing is a style that explicitly pursues social and environmental objectives as well as purely financial ones.

In many cases investors are willing to sacrifice some of the latter to achieve the former. Typically, impact investing occurs in the emerging markets, in private transactions and at a small scale: to date the average investment has been in the USD 1 million range. Typical projects might include the purchase and distribution of cleaner-burner cooking stoves or solar-powered lamps, to rural villages in Africa, Asia or Latin America. All very good stuff, but…

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Unexpected shocks can open the door to sustainability opportunities.

By David Wilcox

There are no black swans in the Northern Hemisphere, so whiteness was assumed to be an essential quality of swanness. When a Dutch explorer spotted a black one on an expedition to Australia in 1697, that concept had to be restated. It is a simple but useful analogy for how fragile a system of thought actually can be. Our assumptions, whether they result from reason, logic, falsifiability and/or evidence, can be undone in a moment. (See a brief description at the bottom of the post regarding Taleb’s use of the term “black swan.”)

As the second decade of the 21st century experiences continued natural and man-made disasters, the popularity of books like The Black Swan (by Nassim Nicholas Taleb) can be seen in a negative light. Added to the natural shocks is a string of unfortunate black swan (rare event) moments that have appeared successively in economics, the financial world infrastructure and politics. However, when enough people become dissatisfied with the business-as-usual approach, a world of increasing connectedness is also offering opportunities to create movements and infrastructure that can lead to the beneficial, good news black swans.

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