#upj15 · A Primer on Impact Investment Ryan Little . 2 What is impact investment? Definition...
Transcript of #upj15 · A Primer on Impact Investment Ryan Little . 2 What is impact investment? Definition...
#upj15
#upj15
Corporate Impact Investing: Neue Finanzierungsmodelle
! Ryan Little, BMW Stiftung ! Fabian Suwanprateep, Beyond Philanthrophy ! Christophe Poline, Schneider Electric
Moderation Felix Dresewski, HIT-Stiftung
Präsentiert von
UPJ March 19, 2015
A Primer on Impact Investment
Ryan Little
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What is impact investment?
Definition adapted from WEF, GIIN & FASE
“An investment approach that
intentionally seeks to create both
financial return and positive social
and/or environmental impact that is
actively measured.”
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What is impact investment?
Source: E.T. Jackson & Associates: „Accelerating Impact Investment“
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The actors
Adapted from Big Society Capital, G8 Social Impact Investment Taskforce
Pension funds & insurance companies
Corporates (CSR or
“Breakthrough”)
Foundations
Mutual funds (incl. SRI)
Billionaires & Family offices
HNWIs (>€1MM)
Mass Affluent (€100k-€1MM)
Mass retail (<€100k)
Public development banks (KfW)
Banks (proprietary investing)
EU regional development funds (i.e.,
LEPs)
Supply of capital/ investors
Government
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Intermediaries
3
For-profit social enterprises
Charitable organisations
Recipients
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Debt
Equity
Transactional banking (e.g. GLS Bank)
SIBs
Financial products
Fund managers (e.g.
BonVenture)
Crowdfunding
Investment readiness
(e.g. FASE)
Angel networks (e.g. ClearlySo, Toniic, Impact Angel Society)
Foundations
Guarantees / risk sharing
Quasi-Equity /Mezzanine
Strategic partners
(e.g. Impact Hub, Taproot)
Current
Mid-Term
Future
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What it means to the social sector
If every foundation in the US allocated 5% of its endowment to impact investing, it would double the amount of capital that is available to social organisations from total annual grants
-The First Trillion
Traditionally-invested endowments of German foundations
Interest @ 3% - funding available to organisations
Traditionally-invested endowment of German foundations
15% of endowment allocated to impact investments available to organisations
Interest @ 3% - funding available to organisations
Impact capital available to social sector organisations in Germany
…with traditional, grants-only financing …with grants and impact investing
€100 Billion
€3 Billion €3 Billion
€85 Billion
€15 Billion
€100 Billion is an estimate of the Bundesverband für Deutsche Stiftungen 3% is a BMW Foundation internal assumption
If every foundation did what the BMW Foundations are doing, we would increase the at-work capital in Germany from €3 Billion to €18 Billion during any given year
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Why do investors make impact investments?
Source: GIIN, J.P. Morgan. Based on responses of 47 investors who make impact investments
• Notice that several of the answers given are purely financially-focussed
• Increasingly investors are seeing the value of impact investment as simply good business
• Not to be underestimated: client demand. Imagine if pensison-holders demanded social impact from their pension investments…
• Over the next years and decades, we could see trillions of dollars put to social use from traditional, corporate investors
Motivations for traditional investors to allocate capital to impact investments
Are impact investments riskier?
Source: KL Felicitas Foundation
KL Felicitas Foundation Global Public Equity vs. MSCI World Index
“...we have come to the conclusion that strong (environmental, social, governance [ESG]) capability today is a predictor of future financial performance; in other words, to predict a company’s financial performance, pay attention to its current ESG capability.
-Gavin E.R. Wilson, CEO, IFC Asset Management Company
Charly Kleissner
Founder, KL Felicitas Foundation
Founder, Toniic
Founder, 100% IMPACT
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The growth of impact investment
Source: C Clark, J Emerson and B Thornley, A Market Emerges: The Six Dynamics of Impact Investing, The Impact Investor project, 2012
Culumulative number of impact investment funds globally, 1970-2012
Source: Toniic E-Guide, Fall 2013
$4.4 Billion $400 Billion - $1 Trillion
Market size could increase 10-25 x in ten years!
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What are the challenges?
Source: GIIN, J.P. Morgan; images: Business Insider, World Bank
Multiple challenges to the growth of the impact investing industry
„I say, old chap, where are the deals?“ „Now , where is the funding to scale?“
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Corporate"Impact"Inves0ng"–"An"Outlook"for"Germany"19/03/2015"
Fabian&Suwanprateep&&Projektmanager"Beyond"Philanthropy"–""invest"impact"GmbH"[email protected]""
Jahrestagung&des&UPJ5Netzwerks&engagierter&Unternehmen&&und&Mi;lerorganisa>onen&
2"
02&Overview"Corporate"Impact"Inves0ng"
6"9$
• The"development"of"corporate"engagement"
• Corporate"impact"inves0ng"at"a"glance"
• Comparing"and"contras0ng"corporate"impact"inves0ng"
03&Outlook"for"Germany"
10"12$
• The"German"Landscape"of"Corporate"Impact"Inves0ng"
01&Beyond"Philanthropy"
3"5$
• Mission"
• Services"
Agenda"
3"
02&Overview"Corporate"Impact"Inves0ng"
6"9$
• The"development"of"corporate"engagement"
• Corporate"impact"inves0ng"at"a"glance"
• Comparing"and"contras0ng"corporate"impact"inves0ng"
03&Outlook"for"Germany"
10"12$
• The"German"Landscape"of"Corporate"Impact"Inves0ng"
01&Beyond"Philanthropy"
3"5$
• Mission"
• Services"
Agenda"
4"
What"is"our"mission?"Ac0ve"Philanthropy"connects"philanthropists"and"social"investors"in"a"safe"space,"Beyond"Philanthropy"supports"businesses,"founda0ons"and"individuals"through"tailored"advisory"services."
Planting the idea.
DONATES PROFITS
Nourish the idea and let it flourish.
non-profit for-profit
Ac>ve&Philanthropy& Beyond&Philanthropy&
5"
In"which"areas"does"Beyond"Philanthropy"operate?"Beyond"Philanthropy"supports"clients"in"the"process"of"formula0ng"an"idea"and"implemen0ng"it."
Conducting research
Formation
Selecting initiatives
Developing strategies
Managing projects
Establishing structures
Evaluation
Support"the"process"of"crea0ng"social"impact"organiza0ons"(founda0ons,"social"purpose"organiza0ons"etc.)"
Finding"the"suitable"strategic"direc0on"for"a"philanthropic"commitment"and"social"investments"
Developing"organisa0onal"structures,"analysing"and"reviewing"areas"of"interest"for"funding/inves0ng"
Examining"poten0al"projects"for"funding,"connec0ng"sponsors"and"projects"
Accompanying"the"implementa0on"of"selected"projects,"including"communica0ons"and"monitoring/repor0ng"
Conduc0ng"project"evalua0on"for"the"purpose"of"impact"assessment"
6"
02&Overview"Corporate"Impact"Inves0ng"
6"9$
• The"development"of"corporate"engagement"
• Corporate"impact"inves0ng"at"a"glance"
• Comparing"and"contras0ng"corporate"impact"inves0ng"
03&Outlook"for"Germany"
10"12$
• The"German"Landscape"of"Corporate"Impact"Inves0ng"
01&Beyond"Philanthropy"
3"5$
• Mission"
• Services"
Agenda"
7"Source:"modified"from"Impact"Economy"2014,"“Driving"Innova0on"through"Corporate"Impact"Venturing:"A"Primer"on"Business"Transforma0on“"2014"
The"development"of"corporate"engagement"In"the"development"from"a"compliance"centered"approach"towards"value"crea0on,"corporate"impact"inves0ng"could"have"the"poten0al"to"be"a"new"tool"in"corporate"engagement,"innova0on"and"value"crea0on"
Compliance"
Corporate"Philanthropy"
Strategic"CSR"
Responsive"CSR"
Corporate"Impact"Inves0ng"
Integra>
on&in&core&bu
sine
ss&
Compliance&vs&Value&Crea>on&
Focus"on"responsibili0es" Focus"on"value""
Sustainable"venture"
Unsustainable"venture"
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Social/Environmental&&+&Financial&Return&
Impact&Inves>ng&
Strategic&+&Financial&Return&
Corporate&Venture&Capital&
Corporate"impact"inves0ng"at"a"glance"The"emerging"trend"of"corporate"impact"inves0ng"(CII)"combines"elements"of"impact"inves0ng"and"corporate"venture"capital"(CVC)"
Corporate&Impact&Inves>ng&
Social/Environmental&+&Strategic&+&Financial&Return&
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Comparing"and"contras0ng"corporate"impact"inves0ng"The"table"below"illustrates"the"commonali0es"and"differences"between"the"three"different"concepts"
Impact"Inves0ng" Corporate"Venture"Capital" Corporate"Impact"Inves0ng"
Investor" Funds,"founda0ons,"individuals" Companies,"corporate"fund"or"a"designated"investment"en0ty" Companies"and"their"employees"
Investee" Impact"inves0ng"funds"and"social"enterprises"" Innova0ve"external"companies""
Starteups"and"spineoffs"with"environmental"and"social"goals"/"afributes,"impact"inves0ng"funds"
Financial"investment"form"" Equity,"debt,"quasi"equity" Equity Equity,"debt,"quasi"equity"
Nonefinancial"investment"(0me,"talent"and"trust)" !" ! ! Expected"financial"return" !" ! ! Expected"strategic"return" x" ! ! Expected"environmental/social"return"
!" x" !
10"
02&Overview"Corporate"Impact"Inves0ng"
6"9$
• The"development"of"corporate"engagement"
• Corporate"impact"inves0ng"at"a"glance"
• Comparing"and"contras0ng"corporate"impact"inves0ng"
03&Outlook"for"Germany"
10"12$
• The"German"Landscape"of"Corporate"Impact"Inves0ng"
01&Beyond"Philanthropy"
3"5$
• Mission"
• Services"
Agenda"
11"
An"Outlook"for"Germany"While"several"major"German"companies"have"established"corporate"venture"capital"companies,"only"Tengelmann"has"in"addi0on"a"corporate"impact"inves0ng"vehicle"
Company& Corporate&Venture&Capital& Corporate&Founda>on& Corporate&Impact&Inves>ng&
BMW&i&Ventures&Seeks"starteups"with"the"poten0al"to"create"a"las0ng"impact"in"the"area"of"mobility"services"
Robert&Bosch&Venture&Capital&GmbH&Invests"in"starteup"companies"either"directly"or"via"a"venture"capital"funds"on"a"worldwide"basis"
Siemens&Venture&Capital&Iden0fies"and"finances"young"companies"worldwide"during"their"starteup"phase"
T5Ventures&Supports"fastegrowing"companies"from"the"first"growth"phase"un0l"market"success"
Tengelmann&Ventures&Focus"on"early"and"later"stage"investment"in"consumer"internet"companies,"internet"marketplace"and"technology"ventures"
???&
???&
currently&&under&considera>on&
???&
n.a.&
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""
PROJECT"MANAGER"
Beyond"Philanthropy"e"invest"impact"GmbH"Monbijouplatz"2"D"e"10178"Berlin"T"""+"49"[0]"30"240"882"4e23"F"""+"49"[0]"30"240"88"24"10"[email protected]"www.beyondphilanthropy.eu"""
Fabian"Suwanprateep"
Thank"you"very"much!"
From global commitment to personal involvement
As the Global Specialist in Energy Management and Automation™
25 billion € revenue (FY 2014)
44% of revenue in new economies (FY 2014)
170 000+ employees in 100+ countries
~5% of sales dedicated to R&D
A large company, with a balanced geographical footprint and a commitment to sustainability
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Understanding the world we are living in Sustainability as a megatrend
vs
Energy demand CO2 emissions
The facts The need
Energy efficiency and resources efficiency are a must
for the planet ... and the bottom-line
The energy dilemma* The energy gap**
Find business solutions for long-term development
collaborating with public and private actors
The rise of awareness
Culture and values
Customer & public
Regulation & ratings
Build a culture and a comprehensive disclosure on
environmental, social and governance data
not only to comply but make it a competitive advantage and
transformation driver
Billion people have no access to energy
Million people live in fuel poverty in Europe
Sources: * IPCC report / IEA World Energy Outlook ** IEA World Energy Outlook / Ashoka poverty study 2013
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Fostering energy access
Solutions for the energy gap
People Fighting fuel poverty
Providing an answer that has an impact
A measured commitment: The Planet & Society Barometer > Communicated quarterly > Audited annually
Contributing to solve the energy equation With…
A recognized commitment • Presence in the DJSI since 2002 • Presence in the CDP since 2011 • #10 of Global 100 most sustainable corporations
Solutions for Efficiency
Active Energy efficiency, Energy management & Sustainability services
Smart cities
Smart grid
Business practices
Products and sites
Employees
Communities
Ethics & Responsibility
Innovation
People
Business
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employees committed with Schneider Electric Foundation actions, during 2013
employees on mission to support the BipBop program through Schneider Electric Teachers NGO
sustainability fellows sharing sustainability best practices & actions through the Company’s Social Network
Employees inFrance have invested in the Access to Energy Saving Plan
Engaging all our employees to fuel our sustainability journey
top managers have performance incentives linked with sustainability
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Since 2009
Fostering access to reliable, affordable and clean energy
people supported to be trained in energy
investments in France, Africa and India
million households gained access to energy
A combined approach of business and philanthropy: Business, Innovation & People at the Base of the Pyramid
Partners & collaboration to succeed
11 2 More than 50 000
P
IBBOP
P
IBBOP
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The Schneider Electric Foundation Highlights
16 years
118 Foundation delegates
+ 38,633 colleagues involved
+700 partners
77 countries
Training in the energy field
Fighting fuel poverty Awareness to sustainable development
3 main programs:
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You can bring your contribution & make the difference!!
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How to get involved?
Schneider Electric Teachers volunteers 319 missions Q2 2014 www.teachers.schneider-electric.com
Employees on secondment in ONG ≈ 30 applications since the launch in Oct. 2013 www.schneider-initiatives-entrepreneurs.com
Volunteers involved whithin the annual campaign 38,633 people involved in 2013 www.foundation.schneider-electric.com
Foundation’s delegates 118 delegates covering +100 countries www.foundation.schneider-electric.com
Schneider Energie FCPE
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A dedicated “impact” investment fund: Schneider Electric Energy Access - SEEA
Support the creation of companies dedicated to tackling fuel poverty issues
Promote the development of business that provide energy access in rural areas
Support the deployment of innovative energy access solutions that use renewable energies for the Base of the Pyramid
Europe International
Creation: July 2009 Current size: € 5M ● Schneider Electric: €3M ● Schneider Energie Sicav Solidaire: 1.700K€ ● Others 200 K€
Return objective: 2-5% In France: Euribor + 100 Internationally: 5 à10%
Investment time: 5 - 7 years
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Ses caractéristiques
Chiffres clés: 3 700 Collaborateurs souscripteurs et 8 M€ investis 5 M € aujourd’hui disponibles pour les projets BipBop 0, 82 % taux de rentabilité 2014 du SE FPCE
Schneider Energie FCPE
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International Investments Mars 2015
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Investments in France : Inclusive social businesses providing low rent and energy efficient housing
Foncière Chênelet
LVD Energie
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