Here are three things we believe impact investors can do now to safeguard the impact of their portfolios and provide much-needed leadership in the investment community.
Provide portfolio companies with frequent, honest communication
While communication with limited partners is a pressing need, it’s ultimately your portfolio companies that will deliver—or struggle with—financial and impact objectives. Make communication with portfolio companies a top priority. Good Finance, a UK-based collaborative of social investors, reassured their investees that they will be "as flexible as possible" during this time: "If you have an investment from one of us and think you may need support or flexibility, please get in touch, we will do our best to help. If you might need investment to help you through difficult trading, please speak to us."
Focus on people first—especially the most vulnerable
Priority one in the first weeks of this health crisis is everyone's safety and wellbeing. Make sure all of your portfolio companies are taking effective health and safety measures for their leadership, staff, and customers and clients. Important questions such as "do your employees have paid sick leave" and "what is your commitment to hourly workers" are the initial steps towards doing so.
Double down on impact-management advice and support
Pivoting into crisis response mode and making the right calls to survive, and ultimately thrive, will put portfolio companies to the test. Now is the time for investors to step up with management advice and hands-on tactics to help portfolio companies through the crisis.
Look for new ways to help your companies double down on impact. Just as you are supporting them in reforecasting financial performance, they also will need your support in reexamining their social and environmental impact goals and accompanying key performance indicators.
Read the full article about impact investing during the coronavirus pandemic by Michael Etzel and Mariah Collins at The Bridgespan Group.