2020 has been quite a year. Many of us are thankful that it is almost over. Before it ends, we wanted to share some of the research and stories that gave us optimism over the past twelve months. Despite headlines having been dominated this year by environmental devastation, racial injustice, an international healthcare crisis, and accompanying economic hardship, we also saw endless examples of inspiration and innovation from the impact investing community.
You may have seen that President-elect Biden has named his Special Envoy for Climate Change, who will be part of his National Security Council. This is a promising political commitment, but impact investors haven’t been sitting on the sidelines waiting for the government to act. This year, Amazon announced a $2 billion ‘Climate Pledge’ venture fund, and has already made its first five investments. Microsoft also launched a $1 billion Climate Innovation Fund in concert with its commitment to be carbon negative by 2030. A PwC report published this fall found that over the last seven years, investment into startups developing tech-enabled solutions to climate change has outpaced the overall VC market by 5x.
Traditional and impact investors have also made numerous commitments to diversity, equity and inclusion (DEI) - both in their own ranks and in portfolio companies. Blackstone issued a mandate for diverse candidates to represent one third of board seats at any companies in which they acquire a controlling interest. Vistria Group set up a new incentive plan that rewards portfolio companies’ management teams for diversity metrics. And Impact Capital Managers announced its inaugural Mosaic Fellowship, which places graduate students from traditionally underrepresented backgrounds into leading impact investment firms for a summer. Mike Asem, a General Partner at M25, shared a thoughtful framework for how other venture capitalists can adopt and execute their own plan for improving racial justice personally and professionally.
COVID-19 has consumed most of our healthcare organizations’ attention this year. But it has also forced public and private entities alike to take action to address inequities in access to and quality of care. Earlier this month, the State of Illinois unveiled a plan to invest $150M to transform healthcare delivery for underserved communities, with a focus on holistic, relationship-based, continuous care. COVID-19 has also paved the way for rapid acceleration of the adoption of telehealth. Legislation has enabled Medicare reimbursement for telehealth services, with additional proposed bills that would eliminate state cross-licensing requirements for telehealth. Not only is this a breakthrough in providing healthcare access to millions of Americans, but it represents a substantial impact investment opportunity.
At a time when many Americans are worried about their financial stability, there are more innovative companies and initiatives than ever to support them. The Inclusive Fintech 50, backed by the likes of Visa, MetLife Foundation, and the IFC, recently announced its 2020 cohort of startups driving financial inclusion and resilience. It’s encouraging to know that more than 400 companies applied, with solutions that address accessibility, affordability, and convenience of financial services in both advanced and emerging markets.
Finally, the total ranks of impact investors continued to grow throughout 2020. The number of signatories for IFC’s Operating Principles for Impact Management grew from 58 to almost 100. IFC published Growing Impact: New Insights into the Practice of Impact Investing to highlight case studies from 32 members of the group. The GIIN Annual Impact Investing Survey, now in its tenth year, has grown from 24 respondents to over 300. And the UN’s Principles for Responsible Investment reported a 20% annual increase of assets under management by investors committed to integrating ESG issues into their decision-making, now at US$103.4 trillion.
While 2020 had its share of meaningful challenges, we believe it has also woken more people up to the needs and opportunities of impact investing, and highlighted where we should be spending our financial and human capital in the coming year. We hope that during the holiday season, you are able to spend time (whether virtual or in person) with family, and to reflect on the ways in which you’ve made an impact this year. We encourage you to click through to the reports we’ve included in this list, as we hope that they inspire you to make new resolutions for impact in 2020.
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