This summer of 2022, we as a family, indulged ourselves to live in a habitat with the rooms raised several meters above the ground. This gave us a wide view of the forest while being one with nature. On that evening, during the guided forest trail, the environmentalist explained how the fig trees and the wasps in it help them pollinate, while each of them being quite edible. Both are completely dependent on each other, one for sustenance and the other reproduction, perfect ingredients for a strong obligate mutualism. While this was taught to us in the school, hearing while being one with nature emphasized it – the need for pollination. In the human world, it could mean collaboration by forming a mutualistic relationship.
Competitive collaboration and its essence to growth: Over the years, helping organizations setup up functional institution leveraging relevant technology to create value, one thing evident to me was the competitive collaboration and its essence to growth. Few examples stated below could explain this better.
- First, Shared Services i.e., Captive or BPO, be it for finance or global business services, the foundation of it all is leveraging technology, collaboration and coming together from a decentralized unit to a common center to get scale. In one of our recent work, there were 75 plus locations coming together to set this center up.
- Second, if you look at the service or manufacturing industry either the Telecom Towers or Automotive, they seem to leverage the platforms seamlessly and only the branding and minor looks, seems to distinguish the collaborators. For example, Renault Duster and Nissan’s Terrano.
- Third, if you look at the Pharma companies, they recently enhanced their collaboration from drug discovery and development to clinical trials and imaging including vaccine development.
These examples of collaboration while also competing, help keep customer at the forefront, leverage each other’s expertise and enables speed to deliver. The pollination and collaboration stated above with examples available in natural habitat and the different industries, leads us to look at how this is relevant for the Impact Investment space.
Impact Investing: This concept is quite nascent in the form that it is currently and has gained prominence in the last couple of decades. It is the capital allocation based on investors belief in Profit with Purpose (P^2) as against only Profit (P^1).
The 2020 ANNUAL IMPACT INVESTOR SURVEY published by GIIN estimates the current market size of Impact Investing at USD 715 billion managed by over 1720 organizations. If we take reference of the IFC report, the size of the market could be USD 2.281 trillion (2% of global AUM) including intended impact assets (without identifiable contribution and measurement of impact).
Some of the leading players, in either only philanthropy or in profit with purpose or both, like the LeapFrog Investments, Omidyar Network, Rockefeller Foundation, Bill & Melinda Gates Foundation, Carnegie Foundation, Aditya Birla Group, Elevar Equity, ABC Impact and many others have made the much-needed impact reaching out to millions. It would be worthwhile to mention that in June of this year, Dr Kuper, founder LeapFrog was appointed an Officer of the Order of Australia (AO) for “distinguished service to the impact investing industry, to global business leadership, and to financial inclusion”. This is only one of the examples of the exemplary work being done by this industry.
However, the one question that these leaders could be asking themselves – Is this pace enough. “The woods are lovely, dark and deep, But I have promises to keep, And miles to go before I sleep, And miles to go before I sleep.” – These lines from the poem Stopping by Woods on a Snowy Evening by Robert Frost may have made the point here. Hence, there is the need for pollinating Impact Investing, impatiently.
Pollinating Impact Investing: On the foundation of profit with purpose, the need for pollinating impact investing is essential if we must expedite the doing good in this lifetime.
1. Any successful research, IT solution (AI or Metaverse) or any other breakthrough available with a particular organization or within a geography impacting social, could be seamlessly made accessible to other organizations or geography.
2. For this to happen, leveraging technology is key and needs a framework.
- To identify Social Solutions existing with any organizations and geographies at a common platform matched to a potential Social Need be it in healthcare & sanitation, food security, humanitarian response, access to affordable insurance and financial products, education and skill development, and many others.
- This platform will then help investors to look for companies in the space, or vice-versa, and bring them to the geography they are needed. The executors of social good will also be able to access this platform.
- This could also democratize the feeling of “Doing Good” to all common people via the platform wherein one could sponsor or participate in an affordable initiative. Taking a leaf out of the affordable shampoo sachet would help in reaching out to many.
- While they are already making inroads, the big consulting firms like the BCG, Deloitte, etc. could then be leveraged as part of their social goals to bring in their best practices of strategic consulting and seamless execution to expedite ground level delivery, blended with tier III service providers. The likes of Global Impact Investing Network, Centre for Impact Investing and Practices, are also bridging this white space.
Can there be a breakthrough in the social area for a 10x impact and most importantly in the now, maybe.
Richard Alvares, VP, Head Program & Business Transformation Shared Service. UKSC, UltraTech Cement Limited