Ramping up Impact Investment in Aotearoa
Impact investment is an exciting category of investment that allows investors to earn returns as well as contributing to social and environmental benefits. It is the sweet spot for a growing number of investors. However, despite rapid growth overseas, there are still few opportunities for New Zealanders to put their money into impact funds.
Mindful Money is launching a campaign to ramp up impact investment in New Zealand, through providing a free and accessible directory of impact funds, working with fund providers to provide new offerings and enabling consumers to call for more fund options.
Barry Coates, CEO of Mindful Money commented: “The lack of impact investment has created a gap in New Zealand financial markets. We have been missing out on the huge growth in impact investing internationally and the social and environmental benefits that can result.”
“This has meant that investors have been unable to invest at least part of their portfolio in issues they care deeply about. It has also meant that SMEs providing climate solutions, regenerating the environment and providing social housing have been missing out on an important source of capital.”
“These new Mindful Money initiatives are promoting the shift of capital along the impact spectrum from ignoring impact, through ethical investing to investing for positive impact. Our aim is to support an acceleration of impact investing in New Zealand. “
Finding an Impact Fund
The widely-accepted definition is that Impact investing has the explicit intention of generating positive social and/or environmental impact alongside a financial return, with measurement of this impact. Impact investment should provide additionality, meaning there are benefits beyond what would have occurred in the absence of the investment.
Over recent years, the first dedicated investment funds have been developed with a focus on making a positive impact, as well as making financial returns. Mindful Money has produced the first directory of New Zealand impact investment funds.
Most of the offerings currently available are restricted to wholesale investors, and there are still few funds available to retail investors. The good news is that this is a fast moving area of investment and new funds are currently being developed. Over time, Mindful Money will add more funds that meet the criteria, as well as government funds and a selection of overseas funds, to keep the directory up to date.
Barry Coates commented: “We are making this directory available as a free service for the public. It fills an evident need - Mindful Money receives a growing number of inquiries from members of the public about where they can invest with a positive impact.”
“Mindful Money aims to provide clear and objective information for members of the public who are assailed by a blizzard of claims about funds being ethical, responsible, sustainable or impact investment. The directory will include impact investment funds that have intentional benefits, identifiably positive impacts and measurable outcomes.”
Use your voice for choice
As the directory shows, there are still very few choices for most investors. Most funds say they are not convinced there is a large enough market demand for impact funds. So Mindful Money is launching a campaign to build public support for more impact investing and more impact funds.
Barry Coates commented: “We want KiwiSaver providers to allocate a part of their funds to investment in social good, environmental regeneration and climate solutions. We have already seen the benefits from scale-up resulting from a few funds investing in social housing. There are liquidity constraints on how much mainstream funds can invest, but far more can be done.”
“We also want dedicated impact investment funds for all investors, not just wholesale investors. There should be opportunities for younger investors and those with limited capital to invest in a range of SMEs with great prospects for generating good financial returns as well as positive impact.”