Expert Q&A on impact investing & climate finance

Devastating headlines about climate change appear in the news every day. For those looking to take action—whether individual or institutional investors, venture capitalists or climate-solutions start-ups—impact investing holds the promise of moving the dial toward net zero.

Basma Majerbi, professor of finance at UVic’s Gustavson School of Business, is co-chair of the UVic-led virtual conference, “The Post-COVID Recovery and the Race to Net Zero,” Aug. 30-31. Majerbi will moderate a public panel on Aug. 31, unpacking how to finance Canadian cleantech.

Here, she explains the critical role of impact investing in funding climate solutions.

Q. What is impact investing, and why is it important to advancing climate solutions?

A. Impact investing is a type of sustainable investing that starts with the investor’s intention to contribute solutions to societal challenges while also seeing financial returns. These investors are committed to measuring and improving the positive impact of their investments on society and the environment. When trying to define their impact goals, many investors are now using the UN Sustainable Development Goals (SDGs) to guide their targets and measure outcomes which makes impact investing a powerful and sustainable investment approach to advancing climate solutions. Environmental, social and governance (ESG) screening, commonly used in the asset management industry, is not enough to meet our net-zero goals.

Q. What are the barriers to adopting these impact investing principles?

A. Barriers range from lack of awareness of existing investment opportunities, to misconceptions about having to sacrifice financial returns, to lacking access to data and expertise, and even concerns about green washing. Many investors lack the knowledge and capacity to access the climate-smart economy.  Information about opportunities, resources and data that they need to make informed decisions can be difficult to find. And for climate-impact entrepreneurs, capital can be hard to come by, often because they are not targeting the right investors or because they don’t know what metrics and frameworks investors are using to screen for opportunities. 

Q. How does the new Vancouver Island Impact Investing Hub help find—and help fund solutions to climate change?

A. Our impact hub at UVic will be a central hub to connect and collaborate with investors of all types, entrepreneurs, start-up incubators and accelerators, businesses, government and policy makers, non-profits, community organizations as well as academics and students. We are currently working on two major databases to help with funding: one about funding opportunities for start-ups and more mature businesses--a one-stop shop to source funding; and one on local companies that works on climate solutions. Other databases will be developed to reduce the information barrier.

Q. How can students and community get involved in the new Vancouver Island Impact Investing Hub?

A. In building the hub, we talked to a lot of local organizations to understand their needs in terms of data, research and practical tools they need in order to take action on impact investing. Many of these projects will help organizations working in the space, while also offering experiential learning opportunities for UVic students, through class projects, research assistance, etc. To help with talent development in impact investing, we have partnered with the National Social Value Fund to launch a student-led impact investing fund in Victoria in the fall of 2021. This is open to UVic students from all disciplines and will be an amazing opportunity to learn social impact investing while supporting local start-ups.  

Q. What is the biggest opportunity you see today for the finance industry to influence climate action. 

A. As the saying goes, “Where money goes, there go emissions.” The financial industry will play a key role in driving climate action by mobilizing private capital towards low-carbon investment opportunities to accelerate the transition to net zero and avert the catastrophic effects of climate change. I think we are at a pivotal moment in history. We now know beyond all doubt, that the time to act is now. The recent release of the IPCC 6th Assessment Report lays it all out. This is a huge opportunity for the finance industry to use its expertise to move capital into the right areas. Impact investing will also help the industry attract the best talent among a new generation of students who are passionate about making the world a better place who will put their hearts into supporting their employer’s mission.

• A media kit containing a high-resolution photo of the researcher is available on Dropbox.
• For more about Majerbi’s role in transitioning to a green economy:
  • UVic and Foresight partner to create a path to net zero
  • Transitioning to a Green Economy: the Climate Finance Project