10/23/2012 08:51 am ET Updated Dec 23, 2012

Impact Investing: A Growing Global Opportunity

Last week in Sao Paulo more than 100 investors, entrepreneurs, philanthropists and services providers gathered to discuss what it will take to unlock more capital for impact investing in Brazil and across Latin America. The gathering of this diverse set of actors was one among a growing number of signals that impact investing -- investments intended to generate both social/environmental good and financial return -- continues to attract interest around the world. Against a backdrop of rising income and wealth inequalities, high volatility in commercial capital markets and a growing sense that "business as usual" is neither sustainable nor desirable, it should perhaps not be surprising that impact investing, with its potential to unlock trillions of dollars aimed at generating positive social and environmental impact as well as financial return, has gained such traction. However, despite many encouraging signs of maturation, a recent evaluation of the field of impact investing cautions that this progress has occurred largely among investors in the United States and Europe. If insufficient effort is made to unlock the growing share of the world's capital now accumulating in Asia, Latin America, Africa and the Middle East, the global impact investing industry risks falling short of its potential to mobilize the resources needed to address the social and environmental problems of the 21st century. Fortunately, leaders across the global South appear poised to take their place as architects of the industry in their respective regions and around the world. Participants in last week's Sao Paulo meeting learned more about the development of impact investing globally, shared perspectives on the similarities and differences that characterize the industry in Latin America, and rolled up their sleeves to identify and prioritize concrete actions that can accelerate the flow of impact capital in the coming months and years. Convened by The Rockefeller Foundation, Omidyar Network and Avina Foundation, this meeting will culminate with the launch of a Latin American Impact Economy Innovations Fund (IEIF). Carmen Correa from Avina explained "we are seeing increasing interest all over Latin America in impact investing, but more resources are needed to catalyze the realization of the field's full potential here. So that is our hope for this meeting and the IEIF: to be catalysts for the emergence of a stronger, more cohesive Latin American impact investing industry." The Fund will provide grant support to the most promising ideas for advancing the industry throughout the region. The Rockefeller Foundation plans to build on the Sao Paulo event with similar meetings and funding opportunities in India and elsewhere in the Global South, as well as continue to work with the Foundation's key grantees in this effort such as the Global Impact Investing Network (GIIN), which aims to alleviate the challenges of impact investing for investors and serve as a forum for identifying and addressing systemic barriers that hinder the impact investing industry's efficiency and effectiveness. According to Paula Goldman of Omidyar Network,

In order for impact investing to reach its full potential and touch hundreds of millions of lives, it takes more than investment in individual firms. The aim of this meeting and the IEIF is to help build the field of impact investing in Latin America, working at a sector- and even systems-level to achieve a greater return of social impact. It's an approach needed here and in many regions, and it's one that we as both philanthropists and impact investors are uniquely positioned to support.

Margot Brandenburg leads the Impact Investing initiative at the Rockefeller Foundation. Kelly Teevan is a Program Associate at the Foundation dedicated its work on impact investing and related areas.