Lecture Slides

OBJECTIVE :

This Global MDP Classroom session will focus on how to effectively set-up and manage impact investment funds and apply innovative finance and business models in order to achieve true impact. Impact Investments have the intention of generating measurable social or environmental impact alongside a financial return – but how can this be achieved? How can impact investments truly provide financial access for social and environmental businesses? Are appropriate products and structures being used? Are the intended impacts being realized? What are the latest innovative financing models that can be applied? What are the sectors where impact investing can be most helpful in reaching SDGs and the climate, health, and environmental challenges facing global development?

How impact investment and entrepreneurship are reshaping developing markets

 Technology now enables us to measure and cost the impact on people and planet that companies create through their products, employment and operations. With $30+ trillion of ESG and impact investment seeking more than profit, investors, as well as consumers, employees, entrepreneurs and governments, have a right to know this impact. Mandating transparency would bring impact, alongside profit, to the center of our economic system by motivating companies, entrepreneurs and investors to bring solutions to our great social and environmental challenges – in effect reshaping markets to create a fairer and more sustainable world.

Readings:

**Sir Ronald Cohen, Impact:  Reshaping Capitalism to Drive Real Change, Edbury Press, 2020. [Read at least Chapters 2 & 3, pp.34-85]

Password required.

Applications:

**A. Koenig, et.al., Innovative Development Finance Toolbox, KfW Development Bank, October 2020.

**Development Impact Bonds:  Bringing a Private Sector Approach to Public Goods, Social Finance, 2019.

**Applying Innovative Finance and Business Models for Real Impact: The How-to of Investment Fund Design and Management, Aspen Learning Lab Impact Management, November 2019.

Rene Karsenti, Social Bonds in Response to Covid-19 Crisis:  When Financial Markets Save Lives, European Capital Markets Institute, May 20, 2020

Financial Innovations Lab Case Studies, Milken Innovation Center-Blum Lab Jerusalem Institute, 2019.

Developing Outcome Funds: Toolkit and Action Guide, Global Steering Group, 2019.

Practical Impact:  GIF’s approach to impact measurement, Global Innovation Fund, June 2019.

“Green and Social Bonds:  A High-Level Mapping to the Sustainable Development Goals,” International Capital Market Association, June 2018.  (N. B.  See and click on Spreadsheet Supplement for full Mapping) and follow up on Sustainability-Linked Bond Principles, June 2020.

Cohen, R., & Serafeim, G. (2020). How to Measure a Company’s Real Impact. Harvard Business Review.

(Optional) Assignment:

Our Special Guest Lecturer in this Global Classroom section will introduce the concepts and tools of impact investing at the beginning.  The majority of the session will turn to questions to our speaker for advice/input on specific existing or potential impact projects or sectors.   We hope to create a dynamic working session to lead to other impact project launches and further development.

After completing the readings, we’re hoping you could prepare specific project questions for possible application of impact investing.  In describing the project (or project target area) in the class, please address the following questions:

  1. What are the financial bottlenecks for this project in meeting SDG challenges?
  2. Why isn’t funding available? Does the market work?
  3. If not, why not?
  4. Who could fund and what do they care about?
  5. What financial tools can help catalyze that funding through a development capital structure stack or design?

If you wish to complete the assignment, please email your responses to Mark Orrs at orrs@mines.edu by end of the day Saturday, October 2nd. We’ll highlight one or two of the best responses we receive during the Global Classroom time, and use them for further discussion and debate.