#EDGEtalk: “The 20 trillion dollar carbon bubble will burst – and we have to be prepared”

Screen Shot 2016-04-14 at 09.02.57Ethical investment is not only an economic imperative, but also essential to align the financial operations of philanthropy with its values and mission, said Charly Kleissner from the 100%IMPACT Network in the latest #EDGEtalk webinar on “Value based investments – How to support the emergence of an economy based on justice and sustainability?”. “If you maximize return based on purely financial consideration, you might maximize something that damages your mission – that’s naïve”, insisted the founder of TONIIC, who is also running his own KL Felicitas Foundation together with his wife on a 100% ethical investment approach.

Jo Andrews, outgoing director of the Ariadne network (“European Funders for Social Chang and Human Rights”) referred to the hiding and secrecy around investments, exemplified by the recently leaked “Panama Papers”, and the risk of public exposure when the philanthropic mission doesn’t match with the investment practice. She gave the example of a foundation that was criticized when journalists found out about its investments in arms sales and petrochemical industry, while the foundation claimed to support peace and good environmental practice. In order to encourage philanthropy to align investments with its values, “the greatest point of leverage is to ask to think of the reputational risk of not doing this”, she said.

In order to move towards a value based investment strategy, the “tremendous division between financial officers and programme officers” needs to be bridged, both Andrews and Kleissner underlined. However, shifting an investment portfolio is a process that can take several years, and has to be managed carefully. Speakers suggested to start with one or two impact investment projects, so programme and finance people can learn how to do it together: “Start slow with something that people really buy in to, and make that the linchpin of a bigger strategy over time. If you have success, this will generate more desire to do impact work”, Kleissner said. In order to showcase examples of ethical investments and inspire other foundations to follow that path, TONIIC will publish a database of the 1200 investments in the 100%IMPACT Network. “The next financial crisis will come and accelerate the transition. We have to be prepared”, Kleissner concluded.

You can watch the recording of the second Ethical investment #EDGEtalk below.

Charly Kleissner’s presentation is available here.

See the blog post and video recording of the first #EDGEtalk “Beyond COP21: What does de-carbonisation mean for investments?” here.

EDGEtalk: Value based investments – How to support the emergence of an economy based on justice and sustainability? from EDGE Funders Alliance on Vimeo.

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