We thought it would be nice to start this post off with some good news. Slowly but surely we’re seeing more and more banks telling us how important it is for them to invest our savings responsibly. And not just the usual suspects like Triodos. Large banks like ABN AMRO, ING and Rabobank feel urged to work on their corporate image.
We’re seeing more and more green colours in their advertising, even online videos to explain the importance of impact investing. Great, right? And they’re actually offering impact bonds. ABN AMRO launched their €200 million Energy Transition Fund in May 2018.
Only a small part of the total assets
If we look at independent comparisons like eerlijkebankenwijzer.nl, it's clear that our big banks have taken small steps in the right direction, but they are still investing a considerable amount in things that harm the planet and the people who live on it. Their investments in social impact are relatively small compared to their total assets. But how much of their money really goes into deals to make a better?
In the case of ABN AMRO's Energy Transition Fund, I’ve asked them if €200m isn’t a bit too little of ambition based on their total assets. And although their answer that Rome wasn’t built in a day is correct, it still felt disappointing to hear. Imagine what could happen if they increased that fund tenfold?
Why Are You Still Optimistic?
In a previous blogpost from Peter Heijen, we learned that only 1.7% of the entire market is invested in social impact. Further, half of this is invested in public companies. So why are we still so optimistic then? Well, first of all, we are glad that banks are starting to talk about social impact and that it’s not only all about financial returns anymore. It is undeniable that impact investing is growing fast and becoming less and less of a niche.
We keep seeing new impact investing offerings opening up to retail investors on a daily basis and a growing impact portfolio within investment companies: i.e. wealthy funds, family offices and individuals. Like I wrote in my other blog post:
Investing With Biblical Proportions
We don’t believe impact investing is a fad. It’s here to stay. How are we so sure? For one thing, tomorrow’s investors, millennials, are leading the way with new lifestyle standards. It almost has Biblical relations: “Love thy brother as thyself”.
Sure, people still want a financial return (as well they should!). But are they ok with just the interest? Several reports show that an increasing group of people, all across the world, want to know what their money is doing while they’re waiting for their interests to be paid.
"It is our job to eradicate poverty, stop hunger, increase worldwide food security, and access to quality healthcare and education, as long as we have the opportunity to do so right in front of our noses."
We Can All Be an Elon Musk
Together we can change the trajectory of human history while still making some money. Not only can we, but further we must take responsibility for the effects of our behavior. It is our job to eradicate poverty, stop hunger, increase worldwide food security, and access to quality healthcare and education, as long as we have the opportunity to do so right in front of our noses.
An Impact Invested Generation
This generation can turn heavily polluted rivers in India into crisp and clear drinking water, create affordable and clean energy for Masai in Kenya, and even create peace in historically conflicted areas around the globe. You don’t have to be a finance professional, you don’t have to know all about development aid, you don’t have to have to be Bill Gates-level filthy stinking rich. There are opportunities starting at just €50 and anyone can join.
So what’s keeping you? Join the movement of impact investors!