Social Impact. Expectation or Nice-to-Have?

 In Impact Investment, Uncategorized

A significant announcement recently hit the impact investment world. BlackRock, one of the largest asset managers in the world, said in their annual statement. “To prosper over time every company must not only deliver financial performance, but also show how to make a positive impact to society.” According to the New York Times, one of the most influential investors in the world is telling chief executives, “Society is demanding that companies, both public and private, serve a social purpose.”

This poses the question, will a social impact be an expectation with for profit companies moving forward?

As an impact investment firm working on affordable housing, we hope that is the case. Social impact is our mission and part of our core values at DRI Fund. There is serious need for affordable housing in this country and we are focused on providing housing solutions and affordable financing for underserved communities.

We have established a double bottom line approach our business where it’s important to show a impactful profit to society and investors alike. We believe that both goals can be met because impact investing is about performance more than anything else.Impact investing requires a rigorous selection process, target setting and guidance in order to be able to help making a long term positive impact on society and people’s lives,” says our team.

It looks like companies are going to be challenged look at their business model and evaluate their impact. If BlackRock does what it says it’s going to do — if they start to sell stocks in companies that can’t firmly demonstrate the impact they are having, it would mean that the stock price of a business will depend, at least in part, on whether or not that business is doing something positive for society,” according to Ross Baird of  chief executive of Village Capital.

 

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