The Editors' Post: Cheerleaders of change assemble in Paris
At the ChangeNOW conference, an economist captivates the room, impact investors sort of disagree, and organisers say it's time to leave Milton Friedman in his grave. Laura Joffre reports back from Paris.
What a way to start a Friday. This morning, I had the chance to attend a discussion with the incredible Kate Raworth – the author of Doughnut Economics, whom my colleague Julie Pybus had the chance to interview last year – at the ChangeNOW festival in Paris. It was striking seeing everyone in the room – young entrepreneurs and veteran investors alike – so captivated by her every word as she outlined her unique approach to economics.
Her energy is just contagious: yes, it’s all doom and gloom, we’re simultaneously killing the planet and pushing more and more people into deprivation every day. But there’s a solution: making sure the economy finds this balance where planetary boundaries are respected while we produce enough to alleviate poverty.
Raworth has been receiving a lot of calls from companies saying they want to adopt her strategy, so the organisation she leads, the Doughnut Economics Action Lab, is about to publish guidelines to help businesses to do that. Because for businesses, adopting a purpose is not enough, she explains: you have to look at how you’re governed and how you’re funded too – dig deeper, otherwise that’s greenwashing. What will be in those guidelines will be very interesting given current debates – will they advise something akin to the B Corp model, or will they ask for a more “purist”, social enterprise approach, at the risk of excluding many companies?
We have to change the way we allocate capital. We can’t leave the markets on their own. We need to leave [Milton] Friedman in his grave - Kevin Tayebaly, ChangeNOW
Every euro counts
So, did I say I was in Paris? Pioneers Post is a media partner of the ChangeNOW summit, a three-day event that gathers hundreds of entrepreneurs, investors, experts and business leaders to discuss how to create positive change for the planet.
On the menu yesterday was a whole morning about impact investing. What struck me in the discussions was the presence of two somewhat opposing schools of thought. On the one hand we heard how impact investing is growing and becoming more mainstream, thanks to the “high-impact, high-return'' principle. But others warned it was mistaken to think that all impact investments could produce double-digit returns – to create high impact, we still need some investors – philanthropists, public funders – who are ready to lose their money, or at least accept lower-than-market returns.
These contradictory views are not new. The latter is something I’ve increasingly been hearing in recent months, with impact investing professionals more and more ready to say we need a reality check on the promise of high returns – and others even claiming impact investing is flawed by fundamental misunderstandings. At the same time, evidence demonstrates that impact investing is growing and people are indeed making money out of it.
I asked around, because I was keen to create a bit of a debate. Unsuccessfully: both sides actually agree that impact investing is a spectrum in which each element has a role to play to create impact in its own way. After all, as EVPA’s Roberta Bosurgi says, “every euro counts”.
Brand new series: The Asian Impact Leaders
We’re delighted to launch our new series, in partnership with Asia’s largest network of social investors, AVPN. The region's most ambitious innovators, policymakers and social investors are set to take their place on the global stage as the G20 comes to Asia this year and next, and over the coming months we’ll shine a spotlight on some of the key thinkers and the big questions they’ll be answering. Dive into our first feature, and check back soon for lots more.
More on Pioneers Post this week: reactions to changes at Big Society Capital, BRAC's growth plans, Freer Spreckley’s latest piece in the Six Social Enterprise Essential series, and much more!
This week's top stories: 20 May 2022
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