Scaling Up Impact Investments to take centre stage at the Global Ethical Finance Forum

  • Under the patronage of the Scottish Government, the 2nd edition of GEFF will spearhead an insightful panel session that focuses on the vast opportunity for investors in balancing risk and reward whilst creating impact for the greater good.

Middle East Global Advisors, a leading financial intelligence platform spearheading the agenda of sustainable and inclusive finance, will convene the second edition of the much-coveted Global Ethical Finance Forum (GEFF) in Edinburgh, Scotland. Based on a strategic partnership with Islamic Finance Council UK (UKIFC), the Forum will be held under the patronage of the Scottish Government, and will be hosted by the Royal Bank of Scotland (RBS), building upon the legacy of the inaugural Forum held in September 2015.

The theme for GEFF 2017 – “Ethical Finance: Merging Profit & Purpose”, is in line with the Forum’s aspiration to serve as a platform of convergence and collaboration across the responsible finance universe, and to forge a vision for a more inclusive and sustainable financial system.

Challenging the long-held views that charitable donations are the best way to address social and environmental concerns and that market investment should solely focus on generating financial returns, impact investing focuses on making investments into companies, organizations and funds with the intention to solve social and environmental issues whilst generating a financial return. The market for impact investing, however, is one that is relatively new. However, recent years have seen collaborative efforts at the global level to spur the development of a high-end market that supports impact investing, efforts that can be seen in the growing membership of bodies like UNPRI, GIIN and other comparable organizations.

Some of the key areas impact investments focus on include economic development, financial inclusion, employment, sustainable living, agriculture and education. As per the Global Sustainable Investment Alliance 2016, presently there are USD 22.89 trillion of assets globally that are professionally managed under responsible investment strategies, demonstrating an increase of 25% since 2014. In relative terms, responsible investment now stands at 26 % of all professionally managed assets globally highlighting the increased significance of sustainable investing across global financial markets.

Interestingly, according to the World Business Council for Sustainable Investment, by 2050, the business opportunities for sustainability-focused companies are expected to be between $3 trillion and $10 trillion annually, or up to 4.5 percent of global GDP highlighting the significant market opportunity that lies in store for impact investing.

With a staggering increase in population year on year, the global demand for food, water and energy calls for innovative improvements in infrastructure to address the grim concern of over-straining resources. Evolving macro-economic trends and millennials are core contributors to the growing impact investment market. Interestingly, a survey by Morgan Stanley revealed that compared to the overall individual investor population, millennial investors are twice as likely to invest in companies or funds that target specific social or environmental outcomes with women more likely than their male counterparts to factor sustainability into investment decisions.

However, a number of obstacles stand in the way of investors achieving scale and efficiency. These include a lack of: suitable exit options, Government support for the impact investing market, appropriate capital across the risk/return spectrum, high quality investment opportunities with demonstrable track record and common standards and segmentation of the impact investing market.

Despite the many challenges it faces, impact investment is here to stay, transcending market conditions and dynamic economic outlooks. In light of the above hurdles and trends, GEFF 2017 will spearhead an exclusive panel session focusing on impact investing. The session aims to assess the performance of impact investors and the entry of large institutional investors, whilst focusing in depth on impact strategies and targeting and measuring social and environmental impact.

The session will also analyze examples of strong Government leadership to develop the impact investing market, understand ways of funding innovations in sustainable investing and understand what a responsible exit looks like.

Across two power-packed days, GEFF 2017 will spearhead a series of sessions focusing on the massive opportunity that lies in mainstreaming ethical finance, one that requires concerted efforts to build meaningful dialogue across its three segments: Environmental, Social and Governance (ESG), Socially Responsible Investing (SRI) and Islamic/faith-based finance. The forum aims to drive thought leadership across a wide range of topics including green bonds, financial inclusion, ethical banking, amongst others, with the vision of bringing ethics to the forefront of business.

The forum will take place on 13th and 14th of September at the Royal Bank of Scotland (RBS)’s prestigious Conference Centre in Edinburgh, Scotland.