A recent webinar hosted by Shamubeel Eaqub with Steven Moe focused unerringly on the essential role of purpose and mission in impact investment. This gathering, supported by Parry Field Lawyers in collaboration with Seeds Podcast and the Global Alliance of Impact Lawyers, offered profound insights into the evolving landscape of responsible investment practices.
The Core of Impact Investing
The webinar opened with a critical examination of the Statement of Investment Policy and Objectives (SIPO) in the context of impact investment. A primary discussion point was the pivotal role of purpose and mission in guiding investment decisions, emphasising that maintaining capital without achieving impactful outcomes is tantamount to failure. The conversation underscored a paradigm shift in investment philosophy; it's not about limiting options but about selectively channelling resources towards achieving a tangible impact.
The Trust Act and Duties of Investment
A significant portion of the discussion was dedicated to the Trust Act, highlighting the dual nature of duties it imposes: mandatory and discretionary. The Act's framework encourages trustees to invest prudently, suggesting a gradual yet firm pivot towards impact investing. Whether starting with a modest 2% or ambitiously stretching to 10%, the journey into impact investing is presented as a measured progression, not a leap into the unknown.
Beyond Traditional Boundaries
The narrative then transitioned to a critical reflection on traditional investment strategies. The speakers argued for a more expansive view of prudent investment, challenging the conventional equating of prudence with conservatism. This segment was a clarion call to boards and trustees to embrace an expansive approach to investment, including upskilling and incorporating fresh perspectives to navigate the impact investing landscape effectively.
Investing in Clean Tech and Impact Funds
The discussion underscored the importance of channelling funds into New Zealand's clean tech and impact investment sectors, such as Soul Capital and Purpose Capital, to drive environmental initiatives forward. These funds represent vital avenues for reducing the country's carbon footprint, particularly in sectors prone to high methane and nitrous oxide emissions. By leveraging local knowledge and innovation, such investments can substantially reduce GHG emissions, contributing to a healthier planet. For example, by investing $151.12M, there's a tangible pathway to reduce emissions significantly, underlining the critical role of targeted investments in achieving environmental objectives and reducing Aotearoa's emissions reduction by $35M per annum.
Beyond Silos: A Holistic Approach to Environmental Impact
The webinar highlighted a common pitfall in traditional investment strategies: thinking in siloes. This approach often leads to missed opportunities for making a genuine impact, especially when investments are kept safe and removed from their potential environmental benefits. The call to action was clear – trustees and boards must adopt a more integrated perspective, considering how every dollar invested can advance environmental goals alongside financial returns. This includes reevaluating investments in terms of their broader impact, beyond mere financial gains, to ensure they contribute positively to New Zealand's carbon economy while ensuring Aotearoa's water infrastructure is locally owned.
Learning and Adapting: The Journey Towards Sustainability
Embracing impact investing and environmental sustainability is a journey, one that requires ongoing learning, adaptation, and a willingness to challenge traditional norms. The webinar served as a reminder that while the path may not always be clear, the pursuit of a sustainable future is a collective responsibility. Drawing inspiration from the principles of Te Tiriti o Waitangi, it calls for a collaborative approach, recognising the diverse stages of learning and expertise across the investment community for new skills needed on trust boards to work with impact investment partners.
Conclusion: A Call to Action for Sustainable Investment
The webinars offered insights and a call to action for investors, policymakers, and the wider community. Investing in clean technologies and embracing a holistic approach to impact investing can significantly reduce New Zealand's GHG emissions and move closer to a sustainable future. This journey requires courage, innovation, and a steadfast commitment to our environmental responsibilities – qualities that, if embraced, can lead to transformative change for the betterment of our planet.