Like Christmas, it's become a tradition for Impact Investing Network and Forsyth Barr Limited to host our annual Impact Investing of the Year Celebration.
Impactful Moments of 2024
It's a time to celebrate all the impactful mahi of the investing sector in 2024 - encapsulated in a showreel.
Aotearoa Impact Investing Story - Phase 1
This year, we put together an Aotearoa NZ Impact Investing Story, which charts the stunning growth of the sector. From 2017 to today investments have grown from $358m to $11 BILLION.
This growth in scale has come from an explosion of impact funds and investors entering the sector. Pioneering new investment models. Proving that we can create positive measurable social, cultural, and environmental impact alongside a financial return.
The increase in the size of impact funds has contributed to the size of the sector e.g. Soul Capital Te Pae ki te Rangi Fund (backed by Foundation North) is $75m, the Bay of Plenty Housing Equity Fund is $100m with a mix of debt and equity.
There have been increasing specialisations in investment themes e.g. housing, climate, decarbonisation, agriculture-based emissions, and social outcomes.
But. We are at just the beginning. Phase 1 of Aotearoa’s impact investing story is complete. In Phase 1, we've sparked the potential of impact investing, and through it, we’ve created insights into future actions and aspirations.
Supercharging the Sector - Phase 2
To get there, we need to take deliberate actions together (e.g. combining Impact Investing Network and Responsible Investment Association Australasia (RIAA) complementary expertise and networks) to bring other investors with an impact lens alongside us.
We need other players to enter the market and complement the existing players. This means more capital from private markets flowing into impact investments from KiwiSaver providers, banks, managed funds, wealth managers, and private equity.
We have to remain steadfast. Keep returning to the ‘why’ to help steer through the short-term volatility. Despite all this short-term noise in the markets, the climate is
still changing, and there is still a housing shortage in NZ. Stick to this.
We need to know what role each of us has in the ecosystem
Who can play the role of taking the risk out of some of these investments?
Who can look long-term and wait for the impact that may not come until a few years later?
Who can bring more impact investments into the ecosystem
Who can influence distribution?
Who can help rebuild and maintain trust and confidence in the market?
The time for setting aspirational commitments is gone - we need thoughtful, practical transition plans outlining how we will get there, including acknowledgement of things outside your control. This is one of the strengths of impact investing. The measurability of outcomes is essential. There are some excellent examples of impact reporting coming out.
Reshaping our view of investment
As we continue to grow the market, we need to continue to reshape the role of investment e.g. social investment has vast potential in applying impact investing models. We need the government to underwrite impact and de-risk for philanthropic and private capital to flow and scale impact.
Iwi with large asset bases can be the catalyst to amplify the whole Māori economy and redefine impact investment. They don’t need to follow the existing models, they can set their own rules driven by the impact of their whenua. Giving other iwi, and mainstream investors, the confidence to follow.
We have the tools, we have the expertise, we have the will, we have all we need
However, we cannot wait. Because we do not need to wait. The pioneers and practitioners in the impact investing sector have built the tools, networks and expertise in phase 1.
In Phase 2 we’re inviting other investors to join our story started in phase 1. However, we’re going to need more capital from bigger investors, and more organisations use investing to achieve positive impact, including:
More equitable, inclusive outcomes for New Zealanders
Reducing emissions
Regenerating biodiversity
Thanks to the sector players for their persistence and collective achievements this year, and since 2017. And to our Impact Investing Network Board and team.
Kia kaha tonu rā!( Keep up the great effort!)
Comments