week 1 Flashcards
(25 cards)
What is impact investing?
Investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return.
What does SDG aligned mean in the context of impact investing?
It means that the company should derive at least 50% of their revenues form activities that are in line with one of the Sustainable Development Goals
What are the four components of the theory of change?
Inputs, outputs, outcomes and impact.
What are inputs in the theory of change?
Resources invested in the project, such as capital, time and materials.
What are outputs in a theory of change?
Direct products or services resulting from the investment such as infrastructure or programs.
What are outcomes in a theory of change?
Changes or benefits resulting from the outputs, such as improved internet quality or reduced unemployment
What is impact in a theory of change?
Long-term changes or benefits, such as economic growth or reduced inequalities.
What is an example of an investment oportunity in impact investing?
Investing in a fiber-optic network company to improve internet quality in rural areas, contributing to SDG 8 and SDG 10.
What are social impact bonds (SIB)?
A contract with the public sector fin which it pays for improved social outcomes that result in public sector savings.
What are the different players involved in a social impact bond?
Government, service providers and investors.
What role does the government play in a social impact bond?
Provides the intitial funding and sets social goals.
What role do service providers play in a social impact bond?
Implemnt proframs to achieve social outcoms.
What role do investors play in a social impact bond?
Provide upfront capital and are repaid based on the achievement of outcomes.
What is additionality in impact investing?
The added value that an impact investment brings beyond what would have occured without the investment. (marginal revenue)
What is deadweight in the contect of additionality?
Outcomes that would have happened anyway without the investment.
What is leakage in the context of additionality?
Benefits that spill over to unintended areas or populations.
What is displacement in the context of additionality?
Negative effects on other areas due to the investment.
What is drop-off in the context of additionality?
Diminishing impact over time.
What is attribution in the context of additionality?
Determining the extent to which the investment caused the observed outcomes.
What is the purpose of conducting due diligence in impact investing?
To assess the viability and potential impact of an investment.
What are the challenges of including impact in the due diligence process?
Measuring the impact and balancing financial returns with social outcomes.
WHat are hte determinants of the intesnsity of due diligence in impact investing?
Size and type of investment, risk profile and expected social impact.
What investment approach did Floyd Davis Finance discuss in their guest lcture?
Whether to invest in a fund or directly into companies.
What did WIre Group discuss about their investment strategy?
The pros and cons of investing in funds versus directly into copmanies/
