Giving Compass' Take:

• Lisa Hehenberger, at Stanford Social Innovation Review, offers investors a deeper understanding of the important, multilevel nature of impact investing in Europe.

• Why is impact investing in Europe so essential, especially for issues like climate change? What can you do to enlighten yourself further on the complexities of impact investing, both in your own country and in other areas of the world?

• Explore pathways towards more expansive impact investing in Asia-Pacific.

Impact investing has taken a foothold in Europe most notably during the past decade, but some countries and regions have developed more rapidly and earlier than others despite pro-impact policies that applied to the entire continent.

The variability presents a message that investors and policy makers can't ignore: If they want to advance impact investing in European regions, they need to account for the field's different levels of maturity in national, subnational, and municipal markets.

While much progress has been made toward mainstreaming impact investing in Europe, many steps remain. As policy makers, investors, businesses, educational institutions, and associations continue to pursue this goal, there are four lessons they must keep in mind:

  • Mobilizing resources across major European regions requires regionally tailored policies and financial instruments.
  • Policies and instruments that have worked in individual countries, such as Solidarity Investment Funds in France, can provide templates for developing impact investing in other nations.
  • Networks and associations should share data and best practices so that less advanced countries can avoid starting their impact investing sector from scratch.
  • Regions as a whole need to integrate impact measurement and management into the tools used by major social institutions, including corporations, large investors, and public funders.

Underlying all of these policies is a need to demonstrate that the public sector gets its “money’s worth” from impact investment. That will entail a clearer accounting of impact within investment formulas so that public and private funders can assess the money saved or even gained by considering social and environmental criteria. It will be challenging but it's a worthwhile endeavor: Impact investing must go beyond a national or municipal scale in Europe to meet major challenges like climate change that ignore geographic borders.

Read the full article about impact investing in Europe by Lisa Hehenberger at Stanford Social Innovation Review.