FINANCE FORUM
FINANCE FORUM
PRIVATE CAPITAL KEY
TO ADDRESS CHALLENGES
By Oren Fuchs and Thato Ntseare
Impact investing off ers investors a proven
route to manage money to boost inclusive
development – and institutional investors have
an opportunity to lead the way.
I
t is diffi cult to put a price tag on solving the world’s big problems, from climate
change to persistent poverty and inequality, but we do know that it won’t
come cheap.
In South Africa – famously burdened by the highest levels of inequality in the world
– the urgency to address a slew of social and environmental concerns is mounting,
manifesting in the ballot box, a growing array of climate emergencies, our lagging
economic growth and rising unemployment.
Historically, South Africa has looked to government spend, philanthropic capital,
development budgets and corporate social investment to address social and
environmental issues. Unfortunately, even all these resources combined cannot
generate the resources necessary to deliver meaningful change at scale. The
International Finance Corporation estimates that it will cost USD7-trillion annually to
meet the world’s Sustainable Development Goals – USD4-trillion for emerging markets
alone. To put this into perspective, South African businesses contributed an estimated
R9-billion through Corporate Social Investment over 2016/2017, while the South
African government budget for 2019 expenditure on social services is R1.1-trillion.
This shortfall has prompted private capital to search for new and more impactful
routes to deliver change. Specifi cally, an investment approach or philosophy known as
‘impact investing’ is gaining traction internationally as a means to do just that.
Defi ned by the Global Impact Investing Network (GIIN) as ‘investments made with the
intention to generate positive, measurable social and environmental impact alongside
a fi nancial return’, impact investing is appealing to a wide range of investors eager
to ‘do well by doing good’. GIIN estimates that some 1300 impact investors currently
manage over USD502-billion in impact investing assets; a tenfold increase since 2013.
Most investors surveyed in GIIN's 2018 Annual Impact Investor Survey are pursuing
competitive, market-rate returns. And research shows that the returns from impact
investment are market related, and in some cases, have exceeded benchmarks.
The Bertha Centre for Social Innovation and Entrepreneurship at the UCT Graduate
School of Business (GSB) has shown in its latest African Investing for Impact Barometer,
About the authors
Oren Fuchs is senior stakeholder manager, and Thato Ntseare is impact investment
manager at Mineworkers Investment Company (MIC). Both are alumni of the 2018
Impact Investing in Africa course off ered by the Bertha Centre for Social Innovation
and Entrepreneurship at the UCT Graduate School of Business.
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African Mining November 2019
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African Mining November 2019
www. africanmining.co.za