Archive - Profitability


The Seduction of Hype

Several years ago, I delivered a presentation on the risks to the emerging discipline of impact investing. Among these risks was the notion that a wave of hype might propel the discpline into the headlines, that major Wall Street firms would see a marketing opportunity (and an enticing opportunity to green-wash in the wake of the financial crisis), and that the resulting flow of capital would overwhelm the small number of viable, investable impact opportunities before the space had the time to organically develop absorptive capacity. I remember the good-natured chuckles that spread through the room as I outlined this potential scenario... and the general sense that those of us who had been working to grow and refine the discipline should be so lucky! 



“An Investment Must Be Profitable For It To Have Impact.” (Discuss.)

We must remind ourselves, particularly in the midst of extremely compelling pitches, that we are investors, not philanthropists (some of us may be both, but to those special few I tip my hat). After all - as we have long argued - if a company is not profitable it is not sustainable. And if it is not sustainable, it cannot have long-term impact. And if it cannot have long-term impact… why are we labeling it an “impact investment”?...

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