In this episode of Strategic Investor Radio, host Charley Wright interviews Fran Seegull, chief investment officer for ImpactAssets. Impact is a nonprofit dedicated to increasing the flow of capital and democratizing access to impact investments, which are investments that seek to maximize social, environmental, and financial impact.
Ms. Seegull says all investments are impact investments, in the sense that all investments have an impact. The impact can be either good or bad. Indeed, she says this principle applies to all forms of human action, from how we consume to how we drive to how we vote.
Around $17 of every $100 invested in public companies has “impact investing” goals. The most common approach is for investors to use “negative screens” for things like alcohol, tobacco, and firearms; but Ms. Seegull says more and more investors are extending the approach to include “positive screens” for things like environmental, social, and governance practices.
Beyond the public markets, Ms. Seegull says around $100 billion are invested in “deep impact” investments – i.e., private companies with a central focus on their social mission, which can be things like job creation or financial inclusion.
Near the end of the interview, Charley Wright asks Ms. Seegull the “million dollar” question: Should investors pursuing altruistic outcomes have to suffer weaker financial returns? She calls this a “perceived tradeoff,” but says the answer is: “It depends.” There are “absolutely” impact investments that generate a market return, or even a premium return, according to Ms. Seegull, but there are admittedly other themes that tend to produce below-average returns.
What keeps Ms. Seegull awake at night? She says the challenge of determining how we can use the for-profit business model to “move the dial” on the world’s “most pressing” social and environmental issues. This, she says, is why she went to business school.