The global financial crisis has demonstrated the need for a shift in investment practice to include conscious choices that pro-actively contribute towards addressing the growing issues of poverty, environmental degradation, climate change and social justice. While socially responsible investment does take us one step towards more sustainable development and living practices, real change demands that investors go beyond this and make choices to put capital to work at scale to generate social and/or environmental value and financial return.
|
In Africa, as the crises deepens, the impact of shrinking foreign capital investment to the continent will have an effect on all of us. It clearly marks the start of a new era where we have to look more and more to our own resources to address the needs of Africa and indeed South Africa. But how do we look locally for new ways to stimulate investment and find new sources of capital? Certainly one of the ways could be to access new and enduring sources of investment capital – such as pension funds.
Compared to the USA, UK, Continental Europe and Australia, South Africa is lagging behind international trends in the use of Socially Responsible Investments (SRI) for pension fund portfolios. We have huge potential to fund sustainable socio-economic development, with approximately R3 trillion in life and pension fund savings which has yet to be tapped into. But only about R10 billion of this is currently directed towards SRI in high-impact social initiatives. |
South African individual and institutional investors, financial services intermediaries, social enterprises and ancillary service providers committed to building and strengthening the potential and capacity of the emerging community investing institutions have an opportunity to collaborate and shape a strong impact investing sector within the country. These key groups are essential ingredients to simultaneously address the supply and demand sides of impact investing as it currently stands in South Africa.
The South African Impact Investing Network provides a platform where all stakeholders in the impact investment sector can meet and constructively address the barriers that currently exist to large-scale impact investment. As a network SAIIN hopes to act as a catalyst to facilitate the development of appropriate support systems and structures required to establish and grow this sector. [read more About Us]. Impact investors want to move beyond “socially responsible investment,” which focuses primarily on avoiding investments in “harmful” companies or encouraging improved corporate practices related to the environment, social performance, or governance. Instead, they actively seek to place capital in businesses and funds that can provide solutions at a scale that purely philanthropic interventions usually cannot reach. This capital may be in a range of forms including equity, debt, working capital lines of credit, and loan guarantees.Monitor Institute 2008 | ||||||
