Great financial innovations arise from moments in time when the world is ripe with opportunity. Around the dawn of the 21st century, one such moment arrived with the impact revolution, a drive to realign investments with social and environmental goals alongside financial goals. The coronavirus pandemic and ensuing economic devastation has highlighted the urgency of a sustainable investing approach in order to build back better.
This movement owes its popularity to the failure of other approaches to development, such as foreign aid. Bottom-line capitalism has brought massive inequity, evident in the class-based and racial overtones of the Hurricane Katrina debacle and the unpleasant reality of global markets exposed in the financial crisis of 2007-10. And then came coronavirus, which exposed the horrid underbelly of globalization and greed, by hitting poor, underserved, vulnerable, often minority populations with disproportionate ferocity.
There has to be a better way – and there is. The profit incentive is a powerful one, so why not embrace this in our quest for economic and social progress? The concept of ESG-based investing (investing in line with environmental, social, and governance goals) is both an affirmation and a reformation of capitalism.
This book is a roadmap to how we can lure huge gobs of private capital into enterprises that promise both financial and social returns.