Brace for impact

But the challenge to mainstream capital is that it is not brave when it comes to doing something new. It does not like to go places where the rules are different or subject to a new set of interpretations, or to go where the expected returns are not calculated in a traditional way or the risks are not standardised.

But we live in times with serious problems. It is no longer sufficient to maintain a convenient disconnect between pressing social and environmental issues and the way in which money is managed. Impact investing is emerging at a time when financial markets around the world are still in turmoil. The economic crisis has shaken confidence in established investment ideologies and their mainstream proponents. The markets desperately need to rebuild trust and respond more effectively and usefully to the needs of their clients. The emergence of the impact investing industry offers a potentially compelling alternative, by offering to imbue investment with social purpose and, ultimately, to increase the scope of solutions to problems that continue to proliferate.

As the late Anita Roddick, founder of the Body Shop, said: “I want something not just to invest in. I want something to believe in.”

Impact investments, as a new asset class, can deliver both. They are investments that inspire.

Geoff Burnand is chief executive of Investing for Good