Impact investment aims to generate positive social and environmental impact while also seeking financial return. In doing so, how can impact investing harness business and capital markets to create systemic change in Asia and the world? What are the critical aspects of building a successful ecosystem?
These were some of the many thought- provoking discussions deliberated in a public lecture organised by The HEAD Foundation (THF) on 23 June 2016.
Over 95 distinguished guests gathered to hear Mr P. Ming Wong, CEO and co-founder of Asia Community Ventures (ACV), share his personal insights as an active player in the field of impact investing and how Singapore and the region can embrace this concept in a big way.
In essence, impact investing combines both traditional investing and the act of philanthropy in engaging businesses to collaborate on working out solutions for social issues, without having to rely on the actions of charities or government help.
Mr Wong started off by elaborating on his work in Hong Kong, where he witnessed first-hand the wide class disparities behind the city’s prosperous façade. With the government making policies only to “treat the symptoms” and not the root causes of its social problems, Mr Wong decided to start up charities (namely ACV), working with entrepreneurs to improve the livelihood of vulnerable communities in healthcare, education and the environment.
“People need to focus on both social and economic benefits… it is not just about financial and social gain… if you are a business person, you don’t just look at the bottom line,” said Mr Wong.
In other words, money and a mission purpose go hand in hand to help the government build society. “We want to expand the amount of resources available to support social change.” observed Mr Wong.
Impact investing brings in business inputs to make the project sustainable. It allows the parties involved to recycle capital rather than merely writing cheques, so companies have to invest the money not just as a grant, but to use it and invest in an education platform.
Additionally, impact investing also requires a sense of understanding of the purpose the organisation is trying to achieve. Companies need to ask themselves whether they are merely creating new jobs or getting to the root of the problem.
“Social innovation cannot happen in a vacuum…. Its partner is impact investing,” concluded Mr Wong. “This is why it is so important for us to build an ecosystem to promote impact investing in Asia.”
An engaging dialogue session followed, with audience members raising concerns on various topics ranging from what governments and businesses can do to help catalyse the growth of impact investing in the region to the challenges of transiting from traditional investments to impact investments.
Excerpts of Mr Wong’s lecture can be viewed here.