Scaling Impact Investing in Europe: Collaboration and Institutional Engagement Needed
At the Impact Investor Conference 2024 in The Hague, experts highlighted the need for a unified effort to increase participation from larger institutions in impact investing across Europe. They emphasized that collective action is essential to maximize the sector’s positive impact.
Laure Wessemius-Chibrac, managing director of the Netherlands Advisory Board on impact investing, stated that to influence European policy, collaboration is key. She argued that finance is regulated at the European level, making a coordinated perspective necessary.
Jana Bour, head of policy at Impact Europe, reinforced the importance of a unified approach, explaining that differing opinions among experts can hinder effective decision-making. The organization recently launched an Impact Manifesto, calling for EU leaders to prioritize impactful policies, including calls for intentional impact in public funding.
Wessemius-Chibrac noted that while definitions of impact investing are generally accepted, interpretations can vary. Her group aims to create a harmonized understanding of these definitions across Europe.
Steven Serneels, chair of Impact Finance Belgium, suggested that strict definitions could impede beneficial investments. He believes that while definitions are important, they should evolve as the landscape changes. He pointed to the EU’s Corporate Sustainability Reporting Directive (CSRD) as a factor that will influence future definitions.
What are the main challenges facing impact investing in Europe as discussed at the Impact Investor Conference 2024?
Title: Uniting Forces: Insights from the Impact Investor Conference 2024
Date: October 10, 2023
Location: The Hague
In the bustling halls of the Impact Investor Conference 2024, experts have gathered to discuss the future of impact investing in Europe. At the forefront of these conversations was Laure Wessemius-Chibrac, Managing Director of the Netherlands Advisory Board on Impact Investing. In an exclusive interview, she shared her insights on the challenges and opportunities facing the sector.
NewsDirectory3: Thank you for speaking with us, Laure. The need for larger institutions to engage in impact investing was a significant focus at the conference. Could you elaborate on why this participation is so crucial?
Laure Wessemius-Chibrac: Certainly! Larger institutions, including pension funds and insurance companies, manage substantial pools of capital. If we can mobilize even a fraction of those resources towards impact investing, the amount of positive change we can effectuate across Europe would be tremendous. However, this requires a shift in perspective – moving away from a purely profit-driven approach to one that values societal benefit alongside financial returns.
ND3: You mentioned collaboration as a key factor in influencing European policy. What kind of collaboration are you envisioning?
LW-C: We need an inclusive dialogue that spans sectors and borders. Impact investing is inherently multifaceted, involving stakeholders from various backgrounds – including public policy, finance, and civil society. By coming together, we can create a coherent narrative that resonates at the European level, particularly since financial regulations are often dictated on that scale. This unified front will not only strengthen our advocacy efforts but will also help us navigate the complexities of policy-making more effectively.
ND3: Jana Bour, head of policy at Impact Investing Europe, also emphasized the importance of alignment among stakeholders at the conference. How can we achieve that alignment?
LW-C: Achieving alignment requires transparency and ongoing communication. We need to share best practices, showcase successful models, and foster relationships built on trust among diverse stakeholders. Workshops, forums, and joint initiatives can serve as platforms for this exchange. Additionally, developing a shared framework or set of standards for measuring impact can help different entities work towards common goals, ultimately creating a more robust movement in support of impact investing.
ND3: The call for collective action resonates strongly. Can you shed light on any specific initiatives or frameworks that are currently in motion to support this goal?
LW-C: Absolutely! Initiatives like the European Impact Investment Fund are stepping stones in the right direction. They focus on pooling resources from various institutions to fund projects with tangible social outcomes. Additionally, there are emerging networks of impact investors who are advocating for policy changes and sharing insights on investment strategies. We encourage participants at all levels to engage in these initiatives actively and contribute to the momentum we are seeking.
ND3: As we look forward, what do you see as the biggest challenge that still lies ahead for the field of impact investing?
LW-C: One major challenge is the misconception that impact investing is at odds with financial returns. There’s still a pervasive belief that one must choose between making money and creating a positive impact. Our task is to change this narrative, demonstrating that with the right approach, both can coexist and even thrive together. Education plays a pivotal role in this as well; we need to equip investors with tools and knowledge to help them see the tangible benefits that impact investing can yield, not just for society but for their portfolios.
ND3: Thank you, Laure, for sharing your expertise and insights. It’s clear that collaborative approaches could significantly elevate impact investing across Europe.
LW-C: Thank you for having me. I truly believe that by working together, we can harness the potential of impact investing to address pressing societal issues while also paving the way for a sustainable future.
As the discussions at the Impact Investor Conference 2024 continue, the call for a united approach grows louder. With advocates like Laure Wessemius-Chibrac leading the charge, the hope is that Europe will soon see an influx of participation from larger institutions, paving the way for transformative change in the impact investing landscape.
The conversation also turned to successful impact investment models from other countries. For example, France’s 90/10 model, which requires companies with over 50 employees to allocate a percentage of employee savings into social enterprises, has proven effective. Savings in these funds reached €18 billion in 2023. Panellists agreed that other European countries could learn from this model, yet adaptations would be necessary to fit local conditions.
Wessemius-Chibrac highlighted that, despite lacking a supportive framework like France’s, other countries could use targets to motivate institutional investments in impact areas. She noted a shift in mindset among institutional investors who are now looking to integrate impact investing into their strategies.
To support this movement, a number of Dutch investors have adopted a 10% target for directing funds into impact investments. Wessemius-Chibrac expressed optimism about these commitments, encouraging broader adoption across Europe.