“We can transform our anxiety into passion. Fear can become hope. The moment demands deep and unwavering commitment to transforming it all. The economy. The planet. The way we treat, see, and live with one another.”
– Jessy Tolkan
In his book Impact: Reshaping Capitalism to Drive Real Change, Sir Ronald Cohen reminds us of a 20 year old warning that “if we do not tackle the needs of those left behind more effectively, a ‘curtain of fire’ would soon separate the rich from the poor in our cities, countries and continents”. Whatever you believe, we only need to look around us to see the instances that give his warning weight. 20 years later, Cohen proposes a solution to prevent and heal the further breakdown of society. He calls it the ‘Impact Revolution’ – the solution that addresses the dangerous inequality and degradation of our planet through impact investing. And he believes it will create a new and better world. I want to tell you why I agree.
Impact investing is a growing investment industry where private investors (or impact investors) work alongside governments, development finance institutions and social impact organisations to solve social and environmental challenges – and make a financial return. It may sound too good to be true, but it’s actually just a meeting point for ethics, brilliance and ROI. The secret is in prioritising innovative start-ups and projects that advance inclusivity, sustainable economic growth and human well-being, and bridge inequality gaps. And for Investors to put their money behind projects that are meaningful and align with their personal beliefs, as opposed to others.
So the task is two-fold: for African governments to find market-based solutions – particularly innovative fund and deal structures, and for investors to partner with them to bring these projects to life..
Impact investing can significantly contribute to achieving the Sustainable Development Goals that the United Nations Development Programme (UNDP) estimates will require between U$ 5 trillion and U$ 7 trillion per year. The investment gap in developing countries alone is estimated at U$ 2.5 trillion per year. In Africa specifically, impact investing can play an important role in achieving the aspirations of the African Union’s Agenda 2063 and advancing human wellbeing on the continent.
Even though extreme poverty has been declining over the last 25 years, the growing gap between rich and poor has widened massively. This should be concerning to public and private sectors as it’s detrimental to economies, the environment and is reported by Oxfam International to negatively impact the wellbeing of people, communities, and societies at large.
The current Covid-19 storm has only exacerbated this looming crisis. Wave after wave, it highlights the massive societal imbalances and inequalities and their connections to deep and rising frustrations. It’s brought to the surface our enormous social, economic, and environmental challenges as a global society, which significantly impact people’s wellbeing and quality of life on a daily basis.
The pandemic has disrupted millions of individuals, families and communities who are at risk of falling into extreme poverty. It’s negatively affected access to food, as border closures and lockdowns have disrupted the whole supply chain. Millions of enterprises have either closed or are fighting for survival, threatening the livelihoods of nearly 50% of the 3.3 billion global workforce, many of whom are vulnerable citizens without access to good health care, nutrition, education, shelter and credit.
Along with Covid-19’s devastating effect on lives and livelihoods, it’s had several positive environmental impacts. During global lockdowns, air quality improved in many cities around the world, greenhouse gas emissions were reduced, and we experienced less water and noise pollution. And as a result of improved water quality in rivers and water bodies, many aquatic species returned to their natural habitats. This gives humanity hope that if we implement the correct strategies on environmental sustainability and change our behaviour, we could see more permanent positive changes in the environment.
As the Covid-19 storm subsides and we return to normal, things cannot continue as they were before. Social tensions will start to rise as inequality surges in both developed and developing countries. People will begin to rebel against current economic and political systems they view as unfair. At the same time, our quality of life and very existence on the planet is threatened. As Cohen points out, the hard reality is that our current economic systems cannot correct this and, in fact, they can make things worse. Not only do governments not have the means to handle the social and environmental challenges, they also cannot develop innovative approaches to overcome them.
We need to find solutions, and we need to find them fast. We must urgently address these challenges if we want to live in the new and better world that Cohen refers to. A world where humanity is more concerned with the sustainable development of people and the planet. And where we move from short-term decision making based on economic indicators alone to multi-decade planning and implementation processes as we enter the post-fossil fuel era.
Governments, together with business and non-governmental organisations, will have to act now if we want to build a fairer world with less inequality and degradation of the environment.
The question is, how can we collectively solve these enormous challenges? I believe we can find viable solutions. But this will require GOOD people, in GOOD organisations, with GOOD capital to intentionally do GOOD. After all, if we can imagine sending people to Mars within the next decade, surely we should be able to overcome our problems and create a new system on our planet.
Complete the form below, and we will send you more info about our upcoming events.
Please complete the form below, and we will contact you.