“New kid on the block” impact investing gains traction in South Africa

08 June 2018 | Nikki Griffiths (Executive of Operations at Tshikululu Social Investments) |

Introduced as recently as 10 years ago, impact investing is changing the face of social investment as we know it.

No longer just accepted as a given, the correlation between real “impact” and social investment is increasingly being challenged by the “new kid on the block” approach of impact investing.

The term – and approach –  was coined just over 10 years ago by the Rockefeller Foundation, describing an investment which seeks both a social and a financial return, as opposed to a “no harm” outcome.

Adoption of the model has accelerated rapidly since 2008, with the Rockefeller Foundation estimating it to be a US$100 billion global industry. South African local investors and financial institutions have followed this trend, seeing it as a viable option when it comes to directing their capital.

The local numbers are particularly compelling. In 2016 the Global Impact Investing Network examined the growth of impact investing in Southern Africa. It found that South Africa was at the centre of the growth of impact investing in this region, with approximately US$15 billion of impact investment having taken place.

As a new model to support social change, impact investing adds another facet to the myriad of ways in which social investors in South Africa can deliver on their mandate to unlock progress. It brings together the two different worlds of financial return and social return, demonstrating that they aren’t mutually exclusive, but rather mutually dependant.

For us as Tshikululu, promoting the impact investing approach makes strategic and measurable sense and is aligned to our vision of achieving deep and sustainable change for the greater good that results in positive social impact.

This concept application is changing the way we think and approach what, why and how we invest for impact – and how we influence funders to do the same.