Humanity is currently dealing with urgent and unprecedented crises such as inequality, war, and the climate crisis. These are just a few of the many existential challenges that need to be addressed.
Brazil has the potential to lead collective action towards sustainable development on a global scale, but it faces several challenges in achieving this position.
It is not possible to create new solutions without significant risk investment. As a result, we are seeing an increasing number of innovators, entrepreneurs, and organizations working on various initiatives, although not always in a coordinated manner, and having to raise funds and sponsorships for their activities. Their positive impact is undeniable.
However, as a development expert, I can assert that much more can be achieved with the available resources, and the crucial factor for this is connection.
Recently, I attended the Impact Investment Conference at Yale University, which was organized from the perspective of investment funds and investors. I would like to highlight interesting points that emerged from this high-level event for my partners and stakeholders.
First and foremost, it’s important to distinguish between two types of investment when discussing the impact solutions ecosystem. The first type is directed towards programs and projects of social organizations or social businesses focused on specific themes. The second type is investment in businesses with scale potential, often technology-based.
Although different, it’s essential to recognize that both occupy the same ecosystem. Thus, they can be complementary and together address the challenges the sector faces.
Especially in the impact business scenario, early-stage companies are predominant. In contrast, most investment funds seek businesses that already have market traction and some impact outcomes. Impact investors are not much different, and as a result, the impact sector faces the following challenges:
- Who defines what impact is? Although the ESG agenda (Environmental, Social, and Governance) is gaining ground in some regions of the world, such as Latin America and Europe, there are still no clear signs of tangible results, much less a minimum standard of what impact means for this ecosystem. Measuring impact over time remains a complex task. How can impacts be measured over 5 or 10 years, for example?
- The proximity between investors and entrepreneurs/solutions is also another factor, especially in emerging markets. Achieving this refinement of relationships, trust, and monitoring is a gap but a fundamental factor in the process.
Impact programs and projects, although they have separate agendas, require special attention from both funds and investors. They have the potential to engage the entire ecosystem and establish agreements and standards for defining impact. Additionally, they have the power to involve, monitor, and collaborate in developing more integrated solutions with comprehensive end-to-end results.
Brazil has enormous potential to lead the impact investment agenda, given its territorial extension and creative and economic potential. Greater integration of Latin America could strengthen the countries in the market, raising innovations and new ways to bring positive impact.
A maturation of the investment market is needed, including the development of standard indicators, continuous assessment of maturity, and monitoring of initiated solutions and innovations.
It is at this point of connection that Damato Partner Track operates, designing solutions for connecting with strategic implementation partners and accessing project financing opportunities.
If you’re passionate about making a positive impact on the planet and share the concerns discussed here, I’d like to invite you to join me for coffee and brainstorm new solutions for creating a better world. What are your thoughts on scheduling a meeting?
Get in touch with Damato Impact Negotiations via email: [email protected]
