One of the most vibrant financial hubs in Southeast Asia, Singapore has discovered the potential of Impact Investing
‘Doing good while doing well’ is a new motto for bankers and investors who believe that profit and purpose can go together. While impact investing is a relatively new jargon for financial people, there is no novelty in the fact that it can positively affect businesses. The challenge often is to calculate the impact, as the human factor is hard to measure and classify.
A few decades ago, studies started to show that happy employees are more productive, or that companies which invest in social or environmental projects in their communities have less legal and reputational problems. The sustainability concept has developed greatly since then. Impact investing was the step onward, as foundations and investors started to realize that all these factors combined – happy employees, respected communities and safe environment – could generate wealth for all.
In Southeast Asia, Singapore emerged as a hub for many of these impact investors, including the Asian Venture Philanthropy Network (AVPN) and Impact Investing Exchange (IIX Asia). A growing number of international impact investing funds have set their offices in Singapore, resulting in more than 300 social enterprises.
Like many of the successful impact investing initiatives worldwide, the island’s government has played a key role in this process, often as one of the intermediate investors and thus helped to foster a welcoming environment for new ones. A recent survey published by Standard Chartered Private Bank showed that 4 in 5 ultra-rich Singaporeans are currently engaged in sustainable investing. According to the report titled Asia Sustainable Investing Review 2018, investors in Singapore have the strongest understanding of sustainable investing in Asia, and about 64% of them are highly motivated to do good and earn a profit at the same time.
Part of the optimistic scenario is due to the fact that young generations, more keen to work and invest with purpose, are starting to play an important role in Southeast Asian financial markets. Another factor is the realization that there’s need to solve social and economic problems in Asia, which requires high-scalable, replicable and potentially profitable solutions. Even giant commercial multinationals like Google have started to develop their own products and services, focusing on technology to improve lives.
The host city of SIGEF 2018 is growing as an innovative impact investment hub and emerges as one of the most promising regions for social entrepreneurship in Asia. Next September, experts and investors will discuss the subject with a qualified audience during SIGEF 2018 by Horyou.