Adjunct Professor and CASE i3 Director Cathy Clark envisions a future combining profit and societal good through the practice of impact investing. Clark makes some creative predictions about how the practice of impact investing could change the world and how that change might happen in this Fuqua Q&A.
Q: The 2008 financial crisis showed that many investors owned investment vehicles they did not understand. What makes subsequent jump in investor awareness important for impact investing?
It’s a small silver lining from the financial crisis that people are now asking about the non-financial impacts of a financial product. Who is its ultimate beneficiary, and how is that product actually creating value? Who could it hurt? The most powerful way to make change is the mindset of people making the change. The mistakes made by people in the financial sector have opened the eyes of a lot of other people who are now asking, ‘So wait, what is actually being done with my money? If I give it to a bank or a mutual fund, is it making rich people richer, helping to grow companies I actually admire or is it doing something else of value?’ The notion of asking those questions has clearly taken root — every survey we’ve seen of financial advisors in the past few years that has asked about consumer appetite for impact products has shown exponential growth in demand. Boomers, millennials, family offices, all are asking, ‘What good can I do through my investment portfolios?’ Many are no longer seeing impact purely as the domain for their philanthropic dollar. The crisis opened the door between investments and impact. Financial service companies are scrambling to educate themselves as a result….
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