The last mile in unlocking sustainable development

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GETTING to the last mile is a common phrase in sustainable development, referring to reaching people, places and small enterprise levels that are under-served and excluded, where development needs are greatest, and where resources are most scarce. Read more at The Business Times.

A lack of knowledge remains the biggest barrier for investors. Our annual study of investor interest in sustainable investing consistently tells us that while interest in this space has increased, sustainable investing may well fall short of becoming a mainstream investment solution anytime soon.

The financial sector needs to bridge this knowledge gap to enable investors to facilitate positive, sustainable economic growth while generating returns. As an industry, we can do more to address the proliferation of acronyms and rally for standardisation, while continuing to educate on the drivers behind sustainable investing.Beyond knowledge, investors are also shaped by their impact personalities.

The most active conversations are driven by those in the Impact Believers category, who show the greatest interest in the topic. This comprises the more sophisticated investors and family offices, and they are comfortable with taking more risk to achieve higher impact in their investments. They like allocating a proportion of their portfolio to direct investments or private equity, as impact generated is more tangible.

While flows to ESG investments have increased, it is important for investors to understand that there is a wide range of sustainable solutions in the market and to understand what they are investing in - and why. I like explaining this in terms of the impact continuum, where on one side of the spectrum sits solutions closer to traditional investments and, on the other side, solutions closer to philanthropy.

 

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