Page 14 - IB August 2021

Impact Investment Impact Investment

Aggie Global food boxes and Daily Good juices

TAKING OWNERSHIP TO FUTURE-

PROOF THE PACIFIC POST-COVID

By Jinita Prasad a social or environmental problem while at the same time
generating an acceptable financial return, we would seriously
COVID-19 has been a stark reminder of how our economic, consider it. After all, these social and environmental issues
social and environmental systems are closely intertwined and can become economic issues that affect our investments gen-
dependent on each other. The pandemic has deeply affected erally. This also goes beyond the social responsibility which I
the economies of many Pacific nations. How the region recov- think most corporates see as an important criteria in how they
ers will be driven by the investment decisions we make now operate.”
and the capital we reallocate towards sustainable industries I agree with Griffon that institutional investors and large
in the short term, laying the foundations for a resilient and corporates do not operate in isolation from these issues and
more adaptable post-COVID future. when these issues start crippling an economy, governments
Recently when I hosted a webinar for major financial insti- usually intervene with stimulative packages, incentives, policy
tutions in the Pacific on the opportunities the region present- and law reforms and even introduction of new taxes such as
ed within impact investing, I realised that the participants environmental levies and corporate social responsibility taxes.
in that Zoom call collectively manage US$4.3 billion – a huge Investors are fast realising that these longer-term and sys-
sum, and a massive potential force for good. It got me think- temic risks affecting their portfolio and overall performance
ing. Can our private equity players, our institutional investors, must be mitigated. And globally, shareholder activism as well
and our financial sector play a more critical role in building as law reforms are rife in driving such transition. Look at the
back better economies by actively seeking investment in busi- Exxon Mobil’s recent example where we witnessed a tiny
nesses that find finance solutions to some of the biggest social hedge fund holding the board of this energy giant accountable
and environmental problems we face – such as clean energy, for its effects on the climate. A Dutch court has also recently
waste management, housing and employment, to name a few? set new targets for Shell’s reduction in gas emissions.
Could these impact investment solutions, when aligned with Our superannuation funds, unit trusts and other institu-
the broader realities of our societies, significantly influence tional investors in the Pacific do have the power to effect
the Pacific’s economic recovery post-COVID? such change by ensuring that the businesses they invest in are
I posed this question to a former colleague of mine, Griffon adequately addressing the environmental, social and gover-
Emose, who heads Kontiki Capital, an investment bank in Fiji nance (ESG) factors within their operations. They can take it
who said, one step further by actively seeking investments that provide
“There is now a lot of buzz around impact investing, espe- social and environmental solutions and allocating a certain
cially in the COVID-19 environment. I think historically, inves- percentage of their portfolio towards it.
tors didn’t really understand that space and tended to view A very fundamental question that these institutions need to
impact investment as “high risk-low return”. But there is answer is whether their fiduciary obligations to the end bene-
increasing awareness that impact investment when well-struc- ficiaries extend beyond the financial return to include positive
tured can be a serious option. As a mainstream investor, if we real-world impact when assessing investments. Impact that
are presented with an investment opportunity that addresses would benefit their very own members, unit holders, employ-

14 Islands Business, August 2021