Why impact investors need a moral compass

"It always comes back to dignity."

This is the value that this year’s Good Deals Pioneers Award winner Jacqueline Novogratz always considers when navigating her way through the difficult decisions she faces as CEO of impact investor Acumen.

Giving the opening speech at this year’s Good Deals social investment conference in London, Novogratz highlighted some of the challenges of her work at the head of the organisation she founded 13 years ago and which aims to change the way the world tackles poverty.

It’s time to embrace the difficult"

"It’s the most interesting, exciting work that anybody could ever do," said the former international banker. But she pointed out that an investor that provides early stage, pioneering capital across the globe faces threats to its success from corruption, complacency and bureaucracy, that it risks failure through pushing enterprises to grow too quickly and even from investing too early in an idea’s development.

But "it’s time to embrace the difficult", she urged the audience. And to do this well investors needed to consider the nuances of what they were doing, and a moral compass to guide them.

Acumen had a manifesto, she said, which was based around the notion of dignity and giving poor people the means to help themselves.

Novogratz described how she visited a public toilet in one of the countries that Acumen works in. "The toilet smelt so much that I could feel the cholera coming up through the bottom of my sandals," she said.

She described how she had talked to 74-year-old Abdul who said he felt standing in line to use dirty facilities made him feel like a beggar.

"Society was paying millions of dollars for toilets but they were still being treated as beggars," she said. "We can do better than that."

Today’s social investors should have "confidence, courage and compassion", she said.

Novogratz was given the Good Deals Pioneers Award in recognition of Acumen’s success in investing $88m in 82 companies in South Asia and Africa, which has created 60,000 jobs and brought basic services to 123m people. The award also celebrates the values she stands for: patience, understanding and an interconnected world.

 

Photo credit: Nik Voigt, Matter&Co