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WebQuest Topic: Sustainable Finance

Questing for Sustainable Investing

  • Knowledge

    • Practical knowledge and advanced understanding of concepts and principles impact investing and venture philanthropy.
    • Deeper knowledge of the UN’s Sustainable Development Goals (SDGs) and related initiatives contributing to their achievement.
    • Practical knowledge of identifying and measuring social and environmental impact of investments.

  • Skills

    • Develop skills in analyzing investment portfolios through the lens of environmental, social, and governance (ESG) factors.
    • Acquire skills in integrating SDGs and ESG considerations into investment decision-making processes.
    • Enhancing research and communication skills.
    • Presentation skills in front of an audience.
    • Learning to tailor investment information for a broader audience.

  • Responsibility & Autonomy

    • Independently analyze the financial and non-financial impacts of investment decisions on sustainability.
    • Independently develop and implement sustainable finance strategies.

In the era of green transition and the pursuit of the Sustainable Development Goals (SDGs), the landscape of investing is undergoing a profound transformation. If back in the days the highest financial return was the sole priority for investors, in nowadays dynamic investment landscape, it is no longer enough. Today, there are other crucial factors to consider, such as social impact, environmental sustainability, and long-term benefits to our planet and communities. Hence, an increasing number of investors are shifting from traditional to sustainable investing. Sustainable investing balances traditional investing with environmental, social, and governance-related (ESG) insights to improve long-term outcomes. More and more investors seek to align their financial goals with their values. Institutions, foundations, and individual investors are increasingly recognizing that they can achieve financial returns while also contributing to the well-being of society and the environment.

Now it’s time to explore two of the most rapidly developing sustainable investment concepts in the last two decades – impact investing and venture philanthropy. As of now you are one of the most famous financial consultants in your country, all the celebrities want you to manage their investment portfolios and receive your advice. One day you receive a phone call from one of your biggest clients, saying that you have 1 day to come up with an investment portfolio for them, the amount you have to invest is 1 000 000 EUR. They explain to you the following: “Look, I do earn more than enough to have a good lifestyle and I want to use this money for a meaningful cause, I don’t just want a financial return, I want to feel that I made a difference. Please think of something and present it to me tomorrow morning”.

You are panicked, you have very little time and a lot of money to invest in something meaningful, so you have to work fast to prepare for your client a sustainable investment portfolio with the aim to find investments to fit his criteria for social, environmental and economic impact. You are well aware that venture philanthropy and impact investing are one of the best options, so you start from there.

Your main task in the “Questing for Sustainable Investing” WebQuest is to carry out thorough research using the “RESOURCES” section and additional information, and to prepare a sustainable investment portfolio and present it to your client. To do this first you will learn more about the Sustainable Development Goals because you want to link your clients’ investments with causes and organisations that are directly contributing towards specific SDGs. Afterwards you will learn more about the impact investing and venture philanthropy investing opportunities related to the cause you would like to address and make sustainable investment portfolio proposition to your client. Good luck!

This WebQuest could be executed both individually by students or in teams of 2-3 people depending on the number of learners in the class. To successfully complete this WebQuest follow the steps below:

 

1. Get an idea of venture philanthropy and impact investing!

At this stage you will have to use both the resources provided within the WebQuest and research further, if needed, to get a better understanding of venture philanthropy and impact investing. Some questions to guide your research are:

  • What is venture philanthropy?
  • What is impact investing?
  • How do these instruments differ from traditional investing tools?
  • What is the difference between impact investing and venture philanthropy?
  • What are the benefits of both tools?

 

2. Learn about the SDGs!

Check out the “Resources” section and research on your own to learn more about UN’s 17 Sustainable Development Goals (SDGs). Based on your research choose one up to three SDGs that you would like to contribute to with the sustainable investments of your client.

 

3. Find the best investment initiatives for the sustainable investment portfolio! – Living Lab activity

At this stage you will have to dive deeper into the sustainable investing landscape to identify possible investments for your clients’ portfolio. To do this, follow these steps:

3.1. Define Sustainable Investment Goals and Criteria

  • Determine Impact Areas: Based on what you already know about the SDGs, decide which social or environmental issues you want to address (e.g., poverty, education, healthcare, climate change).
  • Set Financial and Impact Goals: You have 1 000 000 EUR to invest fast, define the expected financial returns and the social or environmental impact you aim to achieve.
  • Establish Investment Criteria: Determine the risk tolerance, geographic focus, and other preferences for the potential investments.
  • Document all of the aforementioned into a checklist which to use in the search of potential sustainable investment opportunities.

 

3.2. Now do some research to find the investments matching the criteria of your client.

 

Use Online Platforms: Utilize platforms that specialize in impact investing and venture philanthropy, such as:

 

Explore Networks and Associations:

 

Read Reports and Publications: Look for annual reports, whitepapers, and case studies from organizations involved in impact investing and venture philanthropy.

 

Check Impact investment funds and venture philanthropy foundations:

 

Explore crowdfunding platforms that focus on social enterprises, such as:

  • Kiva: Microloans for social impact projects.
  • Kickstarter: Projects with social or environmental goals.
  • Indiegogo: Campaigns for social enterprises.

 

Check out investment Platforms - online marketplaces for direct investments in impact initiatives, such as: ImpactAssets

 

3.3. Evaluate Potential Investments & Choose wisely!

  • Assess Impact Measurement: Review how the initiative measures and reports its social or environmental impact and see if it matches the criteria set in step 3.1.
  • Financial Analysis: Analyze financial projections, risk factors, and potential returns and see if it matches the criteria set in step 3.1.

 

4. Build the sustainable investment portfolio!

Now it’s time to pitch to your client the initiatives you have chosen for his portfolio and present it to them.

Prepare a pitch for your client where you have minimum the following information:

  • Description of each initiative you chose to invest in including: What are its aims and causes; how are they related to the SDGs that you want to contribute to;
  • What amount of the 1 000 000 EUR you suggest to be invested in each initiative and why? What is the expected return on each of the investments? What is the social and environmental impact that these investments are expected to contribute to?
  • Explain the type of each investment – venture philanthropy or impact investing – and why you chose exactly this type of sustainable financial tool.

 

5. Make your case!

Now it’s time to present the sustainable investment portfolio in front of your client and his other financial advisors and ESG experts. The class has to listen and one has to play the role of the client and the rest to be the advisors. Each has to prepare questions regarding the investment initiatives in order to be fully convinced that this is the most impactful investment initiatives to be done.

After responding to the questions of the client and advisors, they have to decide if they give a “YES” or “NO” to your proposition and argue their statement.

About the SDGs

  Platforms:

  Networks & Associations:

  Impact Investment Funds:

  Philanthropic Foundations:

  Impact Investing & Venture Philanthropy:

Congratulations on completing the "Questing for Sustainable Investing" WebQuest!

You have explored the intricacies of designing a sustainable investment portfolio, conducted thorough research, and evaluated the social and environmental impact of the portfolio you’ve build. By understanding the critical balance between financial returns and meaningful impact, you are now equipped with the knowledge to make investments that not only generate profits but also drive positive change.

As you move forward, remember the adage: "Invest in the world you want to see." Your role as a future leader and investor is pivotal in fostering sustainable development and achieving the Sustainable Development Goals (SDGs). Every investment decision you make can contribute to a better, more equitable world.

Carry the principles of venture philanthropy and impact investing with you, and let them guide your endeavors. Whether you are financing a renewable energy project, supporting educational initiatives, or backing social enterprises, never forget your commitment to sustainability.

Thank you for embarking on this quest. We hope it has inspired you to pursue sustainable investing with passion, creativity, and purpose.

Bono and The Rise Fund - Pioneering Impact Investments

Bono, the U2 frontman, has long been an environmental activist, using his platform to advocate for sustainable and social causes. Extending his activism to the financial world, Bono has taken a proactive role in impact investing through The Rise Fund, an American investment fund managed by his firm, TPG. The Rise Fund stands out for its rigorous approach to quantifying the environmental and social impacts of its investments, aligning its efforts with the United Nations Sustainable Development Goals (SDGs).

 

Key Practices:

Quantifiable Impact Measurement:

The Rise Fund differentiates itself by its commitment to measuring and quantifying the impact of its investments. This approach ensures that each investment not only seeks financial returns but also demonstrable social and environmental benefits. By setting clear impact metrics, The Rise Fund provides transparency and accountability, reinforcing its dedication to sustainable development.

 

Strategic Focus on SDGs:

The Rise Fund aligns its investment strategy with the United Nations Sustainable Development Goals. This alignment helps direct capital towards initiatives that address critical global challenges, such as climate action, quality education, and good health and well-being. By targeting specific SDGs, The Rise Fund ensures that its investments contribute to a broader international framework for sustainable development.

 

Sector and Geographic Diversity:

The Rise Fund invests across a variety of sectors and regions, enhancing its impact and reach. Key focus areas include climate and conservation, education, food and agriculture, financial technology, healthcare, and technology. This diversity allows The Rise Fund to support a wide range of mission-driven companies and impact entrepreneurs, promoting sustainable growth on a global scale.

 

Partnership and Collaboration:

Founded in 2016 by TPG in partnership with Bono and Jeff Skoll, The Rise Fund leverages the expertise and networks of its founders. This collaboration brings together a wealth of knowledge and experience, fostering a robust platform for impact investing. The partnership model also facilitates the sharing of best practices and innovative solutions, enhancing the overall effectiveness of The Rise Fund’s investments.

 

Scale and Capability:

With more than $12 billion in assets under management across The Rise Funds, TPG Rise Climate, and Evercare Health Fund, The Rise Fund exemplifies how impact investing can be scaled effectively. The fund’s substantial capital base enables it to support large-scale projects and initiatives, amplifying its impact and ability to drive significant change.

Bono's involvement with The Rise Fund showcases the potential for high-profile individuals and organizations to influence sustainable investing positively.

 

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Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the European Education and Culture Executive Agency (EACEA). Neither the European Union nor EACEA can be held responsible for them.

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