This month PRiMEtime is exploring different ways that business schools are engaging in Impact Investing, whether that is through their teaching, extra curricular activities, research or events.
I recently had the chance to speak with Christie Stephenson, the Executive Director of the Dhillon Centre for Business Ethics at the Sauder School of Business at the University of British Columbia in Canada about the work that they are doing around Impact Investing and Responsible Investing. Her center, which became operational in 2016 and has a major focus on responsible investing, works in close collaboration with UBC Sauder Centre for Social Innovation and Impact Investing, which was formed in 2007.
Why impact investing? Why is it important that students learn about impact investing?
Impact investing is a fundamental shift in thinking about how profits and societal/ environmental good relate to each other. It rejects the notion that the two outcomes are mutually exclusive. Today, many business students come into university truly wanting to make a positive impact on society. Yet they’re studying business and their interest is in business – not necessarily charity or non-profit management. Impact investing provides another channel/avenue to work in global issues other than traditional charities that allows them combine their interest in business with their desire to create social impact. Incorporating environmental, social and governance considerations in investment decision making is also a major trend with retail and institutional investors and therefore it is more important than ever that students understand this. This traditionally gets referred to as Responsible Investing. Some people consider responsible investing a type of impact investing, other people consider impact investing a type of responsible investing. At UBC Sauder we tend to describe them as different, but closely connected, types of social finance.
What are some of the interesting research that the Centre has been doing around impact investing or is planning to do?
The UBC Sauder Centre for Social Innovation & Impact Investing (SauderS3i), which was formed in 2007, focuses in large part on impact investing, as the name suggests. SauderS3i is best explained by using a demand and supply model. It creates demand for impact investment capital by incubating successful social enterprises through the iHub program and it coordinates the supply of impact investment capital through working in partnership with the Pacific Impact Investor Network (PIIN). The Centre works with PIIN members to help them understand issues more thoroughly as well as how impact investing can play a role in their portfolios. The Dhillon Centre focuses specifically on responsible investing within the impact investing spectrum. This can be described as the integration of environmental, social and governance risk and opportunity considerations in public markets investing, whether that’s retail or institutional. One of the Centre’s four pillars is research and recruitment is currently underway for a lead academic to develop this pillar.
How are students engaged in impact investing? What kind of opportunities do they have?
Every summer, SauderS3i hires several interns to work on Impact Investing projects commissioned to us through PIIN members. They range from in-depth analysis projects on specific issues (water, education, housing etc.) to providing insights into impact investing portfolio construction.
The Dhillon Centre also hires a number of part time students. As well, with SFU Beedie Business School it hosts a free two-day workshop on responsible investment for students. We also host a variety of events for students including recent panels and workshops on topics such as “Careers in Social Finance” and “Impact Investing as a Major Philanthropic Trend”.
We currently also have opportunities within the curriculum including an elective on Impact Investing: Social Finance in the 21st Century that ran for the first time last year. In the past we have organized a range of events for students including an Impact Investing Competition.
What have been some of your successes?
SauderS3i has been working on creating one of the first university-based seed-stage funds. UBC has a strong entrepreneurial culture and a number of rockstar social entrepreneurs through our iHub programme (for example Wize Monkey, Arbutus Medical and Alinker). The impact fund aims to provide seed-stage funding to enterprises that are ready to make the next step from an early-stage idea to scaling growth and operations. On the research front, we’re extremely interested in how impact investing venture capital differs from traditional “Silicon Valley” venture capital. Unlike tech start-ups (like Facebook, Google, Uber), not many social enterprises will have traditional exits like IPO or get sold to another company. So we’re looking at how deal structures can be designed to respect this different dynamic, and at the same time create returns for investors.
Both Centres do a lot of work to foster discussions around Impact Investing in the community. This includes hosting meetings to bring together impact investors in Vancouver and events open to the public. For instance this month, the Dhillon Centre co-hosted an event with the SFU Beedie School of Business called “Reconciliation: A New Relationship for Investors” which explored how investors can take into account how companies work with indigenous people and communities.
Sauder S3i’s executive director, James Tansey, is on the Federal Social Finance and Social Innovation Co-Creation Steering Group that is charting out what’s next for Canada’s social finance market. The Dhillon Centre has been invited to speak on impact investing and responsible investing at numerous industry events over the past year, including those hosted by the Chartered Financial Analyst Society, the Responsible Investment Association of Canada, the Conference Board of Canada, and the International Corporate Governance Network, among others.
What’s next?
After five years of successful collaboration between Coast Capital Savings Credit Union and UBC Sauder Centre for Social Innovation & Impact Investing, the iHub is moving on to the next stage of our journey. Starting in November 2017 the iHub social venture accelerator will become an integral part of entrepreneurship@UBC which is the venture accelerator at the University of British Columbia.
Sauder S3i is continually trying to build the impact investing market in Vancouver and western Canada. In the coming months, it will be refining and improving its relationship with PIIN and launching a new investor portal / public impact investing resource guide (www.impactinvestmentforum.com).
The Dhillon Centre is supporting the development of more social finance content within the academic curriculum. We are a member of the iInternational Sustainable Finance Faculty Consortium which held its first in-person meeting this summer in Chicago and appears have great potential as a collective effort to support the advance of impact and responsible investment as an academic discipline.
What are your favourite resources around impact investing? Are there any other impact investing programmes at other schools that you admire?
Anyone interested in impact investing must subscribe to ImpactAlpha’s Daily Brief. You’ll never be out of the loop once you’ve subscribed.
The Impact Terms Project is also very useful. It has a great library of useful concepts related to private equity/ venture capital in impact investing.
Oxford University’s Skoll Centre for Social Entrepreneurship has been a real leader in this space, although they have less of an emphasis on impact investing.
In terms of responsible investing sources, in Canada the best single source is the Responsible Investment Association of Canada. Internationally it may be the Principles for Responsible Investment. There are also some leading practitioners worth following, such as Sustainalytics, NEI Investments, and the Shareholder Association for Research and Education (SHARE).
Any advice for other schools looking at exploring impact investing?
Simply put, it would be “get up to speed sooner rather than later”. Impact and responsible investing are major trends that are changing not only the nature of our capital markets but have the potential for the kind of social and environmental impact that is absolutely critical to people and the planet. With the values shifts taking place because of demographic changes, there isn’t a business school out there that shouldn’t be looking at how to integrate these subjects into their curriculum and activities.
PRiMEtime 