Consulting Rating & Controlling Research Education 2nd Impact Forum Zürich Gutes gut tun: Die Rolle von Impact Investing Natija Dolic, LGT Venture Philanthropy 15. Oktober 2013
2 nd Impact Forum Zürich Gutes gut tun: Die Rolle von Impact Investing Natija Dolic LGT Venture Philanthropy - Creating a Smiling World 15. October 2013
Agenda Gutes gut tun: Die Rolle von Impact Investing Agenda 1. Kontext & Definition «Impact Investing» 2. Gutes tun: Was macht LGT Venture Philanthropy? 3. Gutes gut tun: Wie setzt LGT Venture Philanthropy Impact Investing um? 2
LGT Venture Philanthropy: Challenge 4 billion people live on less than 2 USD a day; they need solutions that are scalable and sustainable 4 billion people live on less than 2 USD a day. 8% of the world s population owns 80% of the world s total wealth. The gap is widening. We strive to narrow it. 3
LGT Venture Philanthropy: Impact Investing Definition Impact Investing Impact investments are investments made into companies, organizations, and funds with the intention to generate measurable social and environmental impact alongside a financial return. (source: Global Impact Investing Network) 4
LGT Venture Philanthropy: Introduction LGT Venture Philanthropy Your partner for philanthropy and impact investing Our mission Increase the sustainable quality of life of less advantaged people. Our approach Based on economic principles we invest and support young, strongly growing organizations with high societal and environmental impact. Offer customized solutions for a broad range of clients. Our main criteria for engagements High societal impact Scalable Professional management team Efficient implementation All human beings should be able to live under dignified conditions and be given a fair chance for personal development in their lives. Wealthy individuals have an economic, political and moral responsibility to champion the cause of disadvantaged persons. In developing countries in particular, the scale of poverty is alarming and the need for help is great. There are limits to the contributions that governments and development agencies can make. This means that helping the disadvantaged in developing countries and assisting social advancement is also a challenge for the private sector. In this respect, it is vital that the invested financial resources generate a high and sustainable social return and do not create any false or unnecessary dependencies nor distort local markets. H.S.H. Prince Max von und zu Liechtenstein CEO LGT Group, Member of LGT Venture Philanthropy Foundation Board
LGT Venture Philanthropy: Return Spectrum LGT Venture Philanthropy focuses on «Impact First» and «Impact Only» engagements Integriertes Mission Investing Mission Investing Traditionell Responsible Sustainable Themen Impact first Philanthropie Vergleichbare Renditen ESG Risikomanagement ESG Chancen Hoher Wirkungsgrad «Finance Only» «Finance First» «Impact First» «Impact Only» Das neue Paradigma Traditionelle Investments Mission-related Investments Program-related Investments Zuwendungen Bestmögliche risikoadjustierte finanzielle Rendite Förderung des Stiftungszwecks «Mission» Förderung des Stiftungszwecks «Mission» «Programm» Förderung des Stiftungszwecks «Programm» Förderung des Stiftungszwecks Marktübliche Rendite Untermarktrendite bis Marktrendite Kapitalerhalt Kein Kapitalerhalt/ Spende Sources: In Anlehnung an Bridges Ventures (2012), Bridges Ventures & Impact Investing: An Overview, p. 3. Schneeweiss, A. & Weber, M, 2012; CSSP Research 6
LGT Venture Philanthropy: Team, board, network Our global team is based in six regions and passionate about creating societal impact Board members Countries with local teams and board Countries with activity and networks Locally and globally, we work with many network and cooperation partners, such as: 7
Summary Gutes gut tun: WAS macht LGT Venture Philanthropy? LGT Venture Philanthropy unterstützt Junge, stark wachsende Organisationen, die hohe soziale oder ökologische Wirkung erzielen Mit Finanzierung, Know-how und Zugang zu Netzwerken Langfristig Vor Ort 8
LGT Venture Philanthropy: Implementation Based on thorough analysis of each organization we agree on milestones for our support and define contracts We have developed a set of professional tools, processes and systems Business Assessment Detailed assessment of management quality and business includes: Problem/solution Business model Market Competition Financials Team & Board Strategic planning Sales & distribution Marketing Pricing Output: Preliminary Review (~7 pgs), Investment Memorandum (~30 pgs) Risk Assessment The risk assessment evaluates different risks and mitigation strategies: External: Macro-economic, technological, reputational, competition Internal: Operational, strategic, financial Mitigation strategies are part of the agreed milestones Capabilities Assessment Capabilities assessment across seven areas: 1. Aspirations 5. Systems and 2. Strategy infrastructure 3. Organizational 6. Organizational skills structure 4. Human resources 7. Culture Existing capability gaps are identified, and initiatives to address those gaps are defined and implemented Impact Assessment Impact is assessed/measured along scale (reach) and depth of the intervention: Reach: How many less advantaged people are reached? Depth: Is their quality of life* improving significantly? * Note: Assessment based on Millennium Ecosystem Assessment (ttp://www.maweb.org/en/index.aspx ) 9
LGT Venture Philanthropy: Portfolio organization Husk Power Systems Bihar, Indien 10
LGT Venture Philanthropy: Impact Measurement Measuring the impact of HPS with the «Logical Framework Approach» and the «Depth of Impact Grid» Reach of Impact Depth of Impact (sources: United Nations Millenium Ecosystem Assessment, www.unep.org) 11
LGT Venture Philanthropy: Impact Measurement Measuring the impact of HPS with the «Logical Framework Approach» and the «Depth of Impact Grid» Reach of Impact Depth of Impact Resources Organization Activities Outputs Outcomes Impact 85 power plants 300 villages reached 200 000 direct beneficiaries 350 people employed 50% saving of expenditure per househould on lightening and cell phone charging Emission of 3 500 tons of Carbon Dioxide avoided by replacing kerosene used for lighting purposes Increase the productive hours for performing household Increase business activities Enables women to complete household activities after dark Creates employment Reduced incidence of fires and respiratory disorders due to replacement of kerosene lamps Enabling children to study in the evening hours Enabling television and other entertainment mediums to function 12
Summary Gutes gut tun: WIE setzt LGT Venture Philanthropy Impact Investing um? LGT Venture Philanthropy Führt eine intensive Due Diligence durch Führt regelmässiges Controlling und Monitoring durch Analysiert Leistung Misst Wirkung Nutzt standardisierte, erprobte Modelle und Verfahren aus etablierten Industrien 13
LGT Venture Philanthropy: Impact Measurement Impact measurement standards are slowly developing as the impact investing sector is maturing and becoming more transparent Internationally accepted standards & methodologies Description Impact Reporting & Investment Standards by the Global Impact Investing Network Global Impact Investing Rating System by B Lab Pulse a portfolio data management system built on Salesforce.com platform Developed by GIIN 14
LGT Venture Philanthropy: Contact 4 billion people at the BOP need sustainable and scalable solutions: Impact investing is one approach for doing good & doing well Contact Natija Dolic natija.dolic@lgtvp.com LGT Venture Philanthropy Färberstrasse 6 CH 8008 Zurich 15
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