Hi, I am Daniel Brandão, impact director at Vox Capital, the first Brazilian impact asset manager. We hold U$150 million in assets under management and our goal is to offer financial returns to our clients alongside positive impact for people and the planet.
In the IMM sessions during the NOLA´s AEA conference, a question was raised more than once: why seek strong IMM practices if no one is pushing for it? In fact, typical impact investment funds do not press for high-quality impact management throughout the investment cycle. And most investors are happy just with a brief note on the impact intentionality of the asset. But the industry must move forward and address all the five pillars of a comprehensive IMM strategy: (1) intentionality, (2) measurement, (3) investors’ contribution, (4) decision-making and learning, and (5) clear communication.
So, I came out of NOLA jazzy-town with that question echoing in my head, as was the riff of Cheese Cake, the famous Dexter Gordon tune. For me, I stand for high-quality IMM in the impact investing industry in order to:
- Secure the integrity of the industry. Impact management is at the core of the impact investing industry. So, the claim to be an impact investor depends on high-quality IMM. Also, impact management is the only way to ascertain whether financial resources are creating the desired positive transformations, thus avoiding the risk of social/greenwashing which has devastating consequences on the reputation of our industry. To achieve this, we must go far beyond just tagging the impact intentionality of the investment.
- Uphold fiduciary duty. In the impact investing market, investors expect financial returns and positive impacts on people and on the planet. It is part of the fiduciary duty of managers to be transparent, dedicate their best efforts to deliver what is contracted and fully report the outcomes of their capital allocation, both financial and impact. IMM provides the evidence to be reported.
- Add value to the asset. High-quality IMM leads to learning and decision making to maximize positive results and minimize negative ones which not only qualifies the asset as being impactful, but also adds both financial and impact value to it.
- Communicate and engage investors. There is still a lot to learn in the emergent industry of impact investing. Impact management surfaces data to inform communication and educate capital providers, necessary for the sustainability of this market in the long term.
The development of the impact investing industry depends on IMM. At Vox Capital, the company I work for, we believe IMM principles, such as transparency about capital allocation and its impact, can influence and even disrupt the overall investing industry. Sounds more like a campaign than a bebop jazz tune. But we, as an evaluator´s community, can dance to it!
- Bluemark (2022). Raising the bar – aligning on the key elements of impact reporting performance. Bluemark.
- Godeke, S., Briaud, P. (2020). Impact Investing Handbook – An Implementation Guide for Practitioners. Rockefeller Philanthropy Advisors.
- Martínez, A.P., Gaggiotti, G., Gianoncelli, A. (2021). Navigating impact measurement and management – How to integrate impact throughout the investment journey. EVPA
Dexter Gordon. Cheese Cake. 1964.
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