Why are individual investors important to impact investing? It seems like a strange question to ask– why are individual investors important? Then again, we sometimes have to say obvious things, like Black Lives Matter, or MeToo, because we found that the evidence and facts told us something, even if we didn’t much like what it said.
Individual investors are important because it is their money that sits with large mainstream investors. If the money simply sits there, uninterested in its effects on the world, it will nonetheless have an effect. Climate change has been financed. Not because the financial system desired climate change as an outcome, but because without the regulatory, tax or other stimulus to a different direction, investment followed short run profit.
Yet, if you look to the positive investment world, of which our social impact investing at Big Issue Invest is part, you find everyday people. Shared Interest has been raising money from ordinary people for international microfinance for 30 years. Ecology Building Society, Charity Bank and Triodos Bank, take deposits from the public and apply them to social or environmental good. Ethex with their positive investing reports, indicates 51% of the population interested in investing “positively” to make their money look good.
Way back in 2004, well before working at the Big Issue Invest was in my mind, I met Nigel Kershaw who founded Big Issue Invest, outside a conference up in Oxford. The two of us were chatting and Nigel explained his vision – could we have a “social” version of a merchant bank? Decades later, I spent a happy afternoon trudging around Venice, looking for some of those early merchant banks we discussed on the steps of Oxford.
I’ve long had this deep belief in the value judgements of the British public on finance. With the caveat that people don’t want to lose their money, and want the same security and return as regular investment, If you give people a choice, a good proportion of them would like to do some good with their money. So why are not more people making the choice, and putting their money where their values are?
The Big Exchange, our latest group project, aims to tackle this. This October, our parent, the Big Issue Group, was one of the founding partners of The Big Exchange, which aims to fulfil part of this vision. It provides a curated selection of 36 social, environmental and impact investments from its 11 investment manager partners. The depth of the positive difference these funds make can be discovered, but they are also given a simple bronze, silver, gold rating for their positive impact alongside risk and historic performance information.