Data-Driven Impact Investing w/ Bridgespan’s William Foster
Apr 22, 2024
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William Foster from Bridgespan discusses data-driven impact investing in private equity. Topics include social impact metrics, driving change in capital markets, setting standards for impact investing, the balance between market returns and social impact, and the importance of clear metrics in distinguishing impact investing from ESG investing.
Private equity firms are focusing on tangible social changes like wage gains and health improvements for impact investing.
The evolution of impact investing involves moving from basic ESG standards to creating substantial social value through capital markets.
Deep dives
Impact Investing Metrics and Standards in Private Equity
William Foster of the Bridge Span Group discusses the importance of developing world-class metrics for impact investing in private equity. By focusing on tangible social changes like wage gains, health improvements, and livelihoods, private equity firms can set best-in-class standards. Companies are urged to move beyond the footprint (operational impact) to the handprint (societal benefits) to truly drive positive change.
Evolution and Differentiation of Impact Investing
The evolution of impact investing is examined over the next decade, moving from ESG practices to driving significant social change through capital markets. Key distinctions are made between basic ESG standards and impactful investments that create substantial social value. Private equity firms are encouraged to adopt rigorous methodologies and achieve high returns to stand out in the impact investing space.
Balancing Social Impact and Financial Returns in Private Equity
Private equity firms like the TPG RISE Fund utilize a structured approach to incorporate social impact metrics alongside financial diligence. By aligning impact targets with commercial returns, firms can exceed expectations in both areas. The success of impact investment hinges on clear metrics, auditable impact results, and a diverse range of investment opportunities that offer significant social benefits.