What is Giving Compass?
We connect donors to learning resources and ways to support community-led solutions. Learn more about us.
Giving Compass' Take:
· Nick Sramek and Greg Wendt share insights on the construction of a new framework to bridge the gap between traditional finance markets and impact investing.
· How can this new framework create positive economic returns for investors? How can it link financial markets with impact investing?
Despite efforts to bring the two closer, impact investing and traditional finance suffer from a misalignment challenge. Since the goals of traditional finance are inherently separate from the qualitative dimensions of values-based investing, creating mechanisms to bridge the gap has been ineffective up to this point. A new framework is needed – and is currently being constructed. All investors must coalesce around principles that have been with us for millennia; the same principles that dictate a natural order have the power to build long-term profitable companies, positive economic returns for investors, resilient communities, and sustainable ecosystems.
Expanding the role of finance is necessary to build long-term resilience which must start with multi-layered systems thinking. Listening to the needs of communities, cities, companies, investors and bioregions – the building blocks of a sustainable society – as a tree listens to its roots – will allow for far greater alignment between companies, investors, communities and the environment. For all of these building blocks, creating systems that have a 100-year vision must be the goal (to create the necessary preconditions for the intergenerational transfer of true prosperity). Taking a long view of how we live today and want to live in 100 years – and perhaps 10,000 years – has the power to not only stave off negative externalities but also repurpose our current systems for a greater good.
Read the full article about impact investing by Nick Sramek and Greg Wendt at Ethical Markets.