Impact investing pioneer Robert Rubinstein
Rabble recently met with Robert Rubinstein, founder of Triple Bottom Line Investment Group, a global consultancy and convenor for the ESG and impact investing community. We discussed a prime driver of our work: investing to make a difference while earning financial return. Robert has been a sustainable investing pioneer for thirty years, and his boldness sets him up perfectly for the challenge. Below, read his perspective on what it will take to bring impact investing to the mainstream.
October 16, 2016
What impact-focused investment products are available to retail investors?
Retail investors haven’t had much access to impact investing – not in Europe, where I’m based, nor in the US. Why? It has been a pain the neck, and expensive, for any company to offer investment opportunities to retail investors due to tight regulations. Thankfully, the regulations have just changed, and crowd-based investing is jumping into this opening. If a crowd based platform were to bring impact investing to retail investors, that would provide major access to opportunities. Access is the hard part; it is the major challenge that holds back impact investing now. It won’t take much to convince retail investors that there is tremendous value in impact investing once they get the access.
So why does access matter?
First, impact investing is a good thing for retail investors. There is truly a business case to this strategy. It’s not just an extension of philanthropy. If you ask anybody: do you want to add value to your financial return by improving the environment or society, who would say no? The problem is that not enough people have been asked this question. Even Pablo Escobar would say “Sure, why not?” Impact investing — while still somewhat new — is not anything weird. It is in people’s interest. Once people take a look at it, they’ll get it. Moreover – the inclusion of retail investors would be a good thing for impact investing. Retail investors probably act differently than institutional investors, who have dominated the field.
How do retail investors act differently than institutional investors?
Traditionally, institutional investors – such as pension funds, endowments, banks, etc – are very conservative. When they invest in impact focused funds, they rarely invest in new fund managers, and require a ten year track record. They’ll only invest in a very specific profile of a fund. This makes it easy for someone who has successfully raised one fund to raise the next fund. But it limits the growth of the impact space by preventing new funds – even potentially good ones – from getting off the ground. Retail investors are probably more open-minded and willing to give new opportunities a chance.
How long will it take for impact investing to become the norm?
Even if you provide access to everyone and make impact investing easy, it will not change overnight. It will be a persistent farming exercise. Crowd investment platforms are planting the seed and giving people a chance to grow something – then, someone else will water it. Rabble’s journey will not be about going on a single hunt. This is farming.