Why are individual investors important to impact investing? It seems like a strange question to ask– why are individual investors important? Then again, we sometimes have to say obvious things, like Black Lives Matter, or MeToo, because we found that the evidence and facts told us something, even if we didn’t much like what it said.
Individual investors are important because it is their money that sits with large mainstream investors. If the money simply sits there, uninterested in its effects on the world, it will nonetheless have an effect. Climate change has been financed. Not because the financial system desired climate change as an outcome, but because without the regulatory, tax or other stimulus to a different direction, investment followed short run profit.
Yet, if you look to the positive investment world, of which our social impact investing at Big Issue Invest is part, you find everyday people. Shared Interest has been raising money from ordinary people for international microfinance for 30 years. Ecology Building Society, Charity Bank and Triodos Bank, take deposits from the public and apply them to social or environmental good. Ethex with their positive investing reports, indicates 51% of the population interested in investing “positively” to make their money look good.
Way back in 2004, well before working at the Big Issue Invest was in my mind, I met Nigel Kershaw who founded Big Issue Invest, outside a conference up in Oxford. The two of us were chatting and Nigel explained his vision – could we have a “social” version of a merchant bank? Decades later, I spent a happy afternoon trudging around Venice, looking for some of those early merchant banks we discussed on the steps of Oxford.
I’ve long had this deep belief in the value judgements of the British public on finance. With the caveat that people don’t want to lose their money, and want the same security and return as regular investment, If you give people a choice, a good proportion of them would like to do some good with their money. So why are not more people making the choice, and putting their money where their values are?
The Big Exchange, our latest group project, aims to tackle this. This October, our parent, the Big Issue Group, was one of the founding partners of The Big Exchange, which aims to fulfil part of this vision. It provides a curated selection of 36 social, environmental and impact investments from its 11 investment manager partners. The depth of the positive difference these funds make can be discovered, but they are also given a simple bronze, silver, gold rating for their positive impact alongside risk and historic performance information.
While at Invest, we directly invest in social enterprises and trading, entrepreneurial charities, the Exchange extends that out, allowing individuals to put their money in alignment with their social, environmental, and ethical concerns. It provides a way for everyone to take action. We are not powerless in the world. We can move our money. Moving our money can make a difference. The Big Exchange aims to help make that happen.
If you would like to know more visit bigexchange.com and sign up to be part of this movement. Please remember that when investing, making money is not guaranteed and your capital is at risk. The value of your fund can go down as well as up. Tax treatment depends on an individual’ circumstances and may be subject to change.
One of my favourite pieces of a disclaimer is, “past performance is no guide to the future.” That was a formal way of saying, just because something performed well financially in the last quarter, or last few years, does not mean it will perform in that way going forward. Wise words. However, I really hope the “past performance is no guide to the future” is really true for our whole financial system. We need a system that delivers good performance for the whole planet, with fair pay and conditions in our economy, good jobs, clean air and water, and recovering, replenished natural resources. That’s a system worth investing in.
The Big Exchange (TBF) Limited is a wholly owned subsidiary of The Big Exchange Limited. The Big Exchange (TBF) Limited is an Appointed Representative of Resolution Compliance Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 574048).
Danyal Sattar, CEO, Big Issue Invest