What Impact Investors Need to Know to Drive Change

To kick off the year, The Hong Kong Jockey Club Programme on Social Innovation at the University of Chicago Booth School of Business partnered with HKU iCube to host Impact Investing: Aligning Profit and Purpose to Change the World, an exploration of how investors are creating a more sustainable and equitable society.

Jienan Han, director of HKU iCube, warmly welcomed over 120 social sector leaders, entrepreneurs, investors, and academics to the HKU iCube multifunctional space in Central, Hong Kong’s central business district.

“Impact investing may seem like just two small words on a book cover, but when applied, it can change the world,” said Kalmond Ma, director for Hong Kong social impact and innovation initiatives at the Rustandy Center for Social Sector Innovation at Chicago Booth. The speaker referred to the latest book by keynote speaker Priya Parrish, adjunct assistant professor at Chicago Booth and chief investment officer at Impact Engine, titled The Little Book of Impact Investing: Aligning Profit and Purpose to Change the World. 

Drawing insights from her book and her experience as an entrepreneur, Parrish asked the audience if there is a way to “fundamentally get more out of capital investments than more money back.” The answer? Impact investing. 

At its core, impact investing is an investment strategy that aims to generate social or environmental impact in addition to financial return. “With impact investing, it is an expectation that you are held accountable for generating impact,” the speaker stated. It is essential to create a strategy that prioritizes outcome as part of the objective to drive impact. In addition, Parrish noted three key points for investors to consider when developing impact goals. 

Determine Your Goal

There are impact investing opportunities in all regions of the world, not to mention every sector. As an investor, ask yourself what your goal is. “Are you trying to improve literacy? Reduce outcomes in health disparities or greenhouse gas emissions? Create more jobs in a local community?” Parrish asked. “Impact alone is not a goal. As practitioners in the industry, it is important to understand what our goals are and match that with the goals of the investments we’re making.”

Determine How You Get There

There are many strategies for generating and measuring impact in impact investing. Parrish added, “There is no one size fits all, but investors need to know how to articulate what the goal is and how they are going to reach it.” Due to the different types of impact, there is not a singular, standard metric that measures impact, making it even more important for investors to be as specific as possible when developing a strategy.

Determine What Success Looks Like

Investors should be able to explain what it looks like to succeed. Parrish noted that this is where measurement comes into play. “It’s accountability,” the speaker mentioned, “If you said this was your goal, tell me how you’re going to measure it.” There are plenty of social and environmental issues that are worth solving. Measuring will help investors determine that they are profitable to solve. 

To unpack the topic further, panelists Cintia Nunes, general manager and head of Asia, The Mills Fabrica, and Josephine Price, chairperson of Social Impact Partners and director and cofounder of Anthem Asia Limited discussed global and Asian impact investing, as well as the challenges of balancing profit with purpose.

Price shared with moderator Brian Tsui, partner at Catallyze, “Impact investment has the capacity to address the unique needs of Asia’s diverse communities, from post-industrial Hong Kong to rural Cambodia, if we remain committed to staying connected with founders and social entrepreneurs. By listening to them and tailoring products and reporting to what is necessary and relevant, we can make a real difference. Impact investing in Asia is a welcoming community, and those looking to start their journey are encouraged to partner with existing players. We’re always happy to start new dialogues."

While Price emphasized that collaboration promotes a positive environmental and social impact, Nunes mentioned “Before fundraising it is important to learn of the different possible funding options, funders’ expectations on both financial and impact returns and know which suits your venture best.

The panelists also encouraged impact investment teams to share and exchange ideas and information to learn how to improve the process and make better decisions. Working together as a community will allow investors to generate positive, measurable impact together. As team members, “You are actually helping to perfect the ecosystem when you embark on a journey to deploy human and financial capital to create unparalleled social impact.” Tsui concluded. 

Visit The Hong Kong Jockey Club Programme on Social Innovation to learn more about upcoming programs and events.