Impact investing in public markets; it’s an issue I’ve explored in many episodes of this podcast. My guest today is Eric Rice, and in his role as Head of active equities Impact Investing at Blackrock, he’s working to bring the rigour of impact investing to public markets.
Blackrock is the world’s largest fund manager, they have more than $7 trillion of assets under management, so the potential to scale impact is massive. But, there are big questions around whether public companies can be held to account in the same way as private companies, and, whether a fund can maintain impact-with-integrity at such a large scale.
On this episode…
We discussed the rapid change that is underway in how investors manage the sustainability of companies that are listed on the share market. There is hunger for sustainability issues to be embedded in portfolio decision making, but ESG isn’t enough.
Impact investing has long been the domain of private markets, and while the processes are different on the stock market, there’s still huge potential for impact.
Eric has been in this game for a long time. He studied economics before working on development projects, and for the World Bank. He wanted to make change in the world, and he saw the financial markets as being his lever to shift heavy objects.
The biggest object of all were the big listed companies, and he set to work to try and adapt the impact models from private markets, over to the public side.
Eric explained the hard work Blackrock has been doing to shift their focus towards sustainable investing, and how the impact fund that he runs is not a nice-to-have, instead, it’s the flagship program that leads their efforts.
We discussed impact measurement, the flaws in SDG aligned investing, the challenges of impact-washing and of course, the impact of Larry Fink’s annual letters.
My key takeaway this week…
“It’s not all about additional funding, there’s lots of ways an impact investor can be engaged to make it more impactful and more profitable.”
Good Future’s Good Books
Impact: Reshaping Capitalism to Drive Real Change
By Sir Ronald Cohen
I think people should be reading this to understand how impact can be, and how it can move from being a niche thing in private markets, to being the main course. And to being central to what we talk about investing. I think it’s the hottest thing out there.
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