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Impact Investing 101

In this video, Vikram Gandhi, founder of Asha Impact and a Senior Lecturer at the Harvard Business School, will give an overview of impact investing.
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In this video you will hear an introduction to impact investing from Vikram Gandhi, one of the founders of Asha impact and a senior lecturer at the Harvard Business School. Let’s listen in. So i think if you look at the spectrum If you think about it as two ends of the spectrum One is investing So When you make an investment you basically are looking at return and in fact the course that we teach the Harvard Business School What we called it which has just been launched Is just called investing in the 21st Century risk, return and impact So if you go back into the investing world initially more than 100 year ago people would just invest and say okay I got a return Then they realized That’s kinda interesting But you need to have some sort of risk metrics Because earning of 10% on something is not the same as earning 10% on something else and therefore you need to understand relative risk I think the phase we are in right now is that in addition to risk and return We have to think about impact so that’s one end of the spectrum Which is pure investing for financial return risk-based return analysis And putting an impact overlay on that by saying look you don’t have to sacrifice financial return but can you actually You know, earn money and do good at the same time Kind of the no cost way of doing good so that’s one end And the other end is pure charity which is a hugely positive activity And has very very important role play in this world But essentially in that role you’re giving money Away, you’re writing a cheque and essentially you not expecting any capital back What you expecting is A social return Of whatever the charity is So you’ve got this end that says I’m investing i’m gonna get my capital back and a market based return Adjusting for risk and on the other end is charity And so the world of Impact investing I really think of in two buckets One is can you use investing and business principles to have more effective charity, which is Lets just not focus on outputs, lets focus on outcomes and develop metrics And monitor and manage them just like you would a business So that’s one side And the other side is Earn market-based returns and do good at the same time In the middle too There is another huge spectrum, which essentially says I can actually sacrifice some market-based return That means I don’t earn my cost of capital But at the same time have impact
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So these are the three buckets Market-based return with impact More effective charity And then there is a whole spectrum in the middle which says there are trade offs between the two And how do you measure them, And how do you manage them and how do you think about them As you make investments.

In this video, Vikram Gandhi, founder of Asha Impact and a Senior Lecturer at the Harvard Business School, will give an overview of impact investing.

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Impact Investing

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