It’s great news that impact investment continues to grow, with latest estimates published by the Financial Times (April 1st, 2019) showing fund values are now more than $500bn.
To qualify as an ‘impact investment’, assets must be deployed in a way that ensures societal and environmental impacts are equal to financial returns. It is, therefore, a far more balanced view of economic benefit, recognizing that focus on financial returns alone is often at a high cost to society overall.
Mirroring a vision
In the context of IACCM, this development is exciting because it mirrors the Association’s vision of ‘a world where all trading relationships deliver economic and social benefit’. And it’s worth remembering that all these funds and associated investments are surrounded by contracts which must be designed to deliver these balanced outcomes.
Achieving the goals of IACCM and impact investments depends upon a fundamental shift in contracting practices and attitudes. Those responsible for their drafting and negotiation must move away from underlying assumptions of bad faith to a model where we design to support and encourage good.
A new realism
Such a shift is not based on wishful or unrealistic thinking. Rather, it
Sally Guyer, IACCM’s CEO, has written on a similar theme today,
Contracts are foundational to our world. By contracting for impact, we truly can make it a better place.