As mentioned in a previous post, there is $1.2+ billion of potential capital for the impact investment market – if only it had the opportunity and means to invest. In order to unleash this capital, it will be important to create and build marketplace legitimacy for impact investments. Requirements for creating such a marketplace:
- There must be legal structures to support social enterprise, both for and not-for profit, and their investors.
- There must be standardized reporting structures, both for financial and impact transparency.
- There must be an exchange to allow for the fluid transfer of information and investments.
Each necessary requirement has been developed over the past few years, and while each is still in its infancy, they have the power to develop and transform the impact investment marketplace. Within the U.S., B-corps and other forms of social enterprise legal structures have emerged to lay foundation for the legal obligations and relationships. The Global Impact Investing Network (GIIN) has helped establish IRIS (Impact Reporting and Investment Standards) to establish credibility and transparency for the impact investment sector. And, now, impact investments will have an exchange, IIX, located in Singapore.
Over time, the mechanics of these independent functions will converge to create a whole “marketplace” for impact investors. What an exciting time to see this sector grow and emerge!
I’d like to credit a post by triplepundit as the catalyst for this blog post. Thanks Leon Kaye…