Impact Investing Op-ed in The Globe and Mail
Jory Cohen, Inspirit’s Director of Finance and Impact Investment, wrote an opinion editorial for The Globe and Mail around the benefits of impact investing.
Read the full article here. Below is an excerpt.
Last month the Texas State Board of Education announced its intention to redeem approximately US$8.5-billion from BlackRock, an investment manager with a reputation for valuing social and environmental metrics in its investment decision-making, citing the firm’s negative effects on the state’s oil and gas sector. In the past couple of years, multiple state treasuries, including those of Florida, Louisiana, South Carolina and Utah, all decided to liquidate significant positions in BlackRock.
It’s no secret that impact investing, an investment philosophy that aims to generate social and environmental benefits as well as financial returns, has its skeptics. Recently, former U.S. president Donald Trump labelled this approach “radical left garbage.”
From a financial standpoint, this is a mistake. It’s very possible to employ impact investing strategies while avoiding a financial haircut. In fact, even as highly profitable fossil fuels and tech stocks dominate the financial markets, investing with an eye for social and environmental impact can lead to an increased probability of higher returns, especially over the long term.
Over the years, properly structured impact investing portfolios have demonstrated resilience in tougher markets and the ability to be opportunistic in stronger ones. Impact investing can be used to both protect downside (as in 2022) and seize upside (think 2023).