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Investors can make a difference says visiting 'impact investing' pioneers

16 Apr 2013

Global capital markets will be reshaped in the decades ahead by socially aware and environmentally concerned shareholders who will want to see measurable benefits flowing from their investments.

That's the view of two of the world's leading experts on 'income investing' who recently visited Sydney as guests of the University of Sydney Business School and the United States Studies Centre.

Jed Emerson, chief impact strategist with the Maryland based firm Impact Assets and venture capitalist, William Janeway, believe that many concerned shareholders are no longer satisfied with relatively passive investments in firms that are "socially responsible".

They say that these investors are keen to take a proactive approach, known as impact investing, which is built around the 'three Ps' of people, planet and profits.

The Global Impact Investment Network defines impacting investing as "investments made into companies, organisations and funds with the intention to generate measurable social and environmental impact alongside a financial return".

During his visit, Mr Emerson held talks with the government and the private sector on IMPACT - Australia, a report on investing for social and economic benefit, which was commissioned by the Department of Education, Employment and Workplace Relations.

Co-authored by Mr Emerson, the report was launched in early April by the Minister for Employment and Workplace relations, Bill Shorten.

"Impact investments are demonstrating ways to achieve substantial benefits for society that would not otherwise occur," Mr Shorten said at the launch. "Examples range from small scale investment in community enterprise and local businesses that create jobs to large scale delivery of vaccines for children in developing countries."

While in Sydney, Mr Emerson attended the local launch of his latest book, 'Doing Capitalism in the Innovation Economy', which has been described by  respected online review site slate.com as "one of the most intelligent, sensible and insightful books about Wall Street published since the financial implosion of 2008".

Funds invest with the intention of producing a measurable social and/or environmental outcome are expected to grow worldwide this year by more than 12 per cent.