This year, more than 50 national elections worldwide are expected to have ripple effects on businesses, investors, entrepreneurs, and the global impact community.
To help inform the future work of impact investors and others, the Sorenson Impact Institute’s 2024 Global Impact Leaders Survey incorporated an emphasis on public policy and impact that reflects their growing intersections. The Global Impact Leaders (GIL) are a diverse and inclusive network of impact practitioners and thought leaders working toward positive social and environmental impact around the world. They represent a range of sectors — including impact finance and banking, media, technology, and more. While their experiences and viewpoints vary, they share a common goal of working toward positive social and environmental impact.
As the end of 2024 approaches and global election results are confirmed, information from the GIL survey can help guide investors and partners as they consider the role of policy and advocacy in their work. With more than $1.5 trillion invested in social and environmental impact, the community has a growing reach. Similarly, leadership changes in the U.S. and elsewhere have implications for their work to shape a more inclusive and equitable economy.
One overarching GIL survey takeaway points to the importance of policy for social and environmental impact initiatives: A large majority of respondents indicated that governments have the most responsibility for implementing the UN Sustainable Development Goals, which represent the world’s biggest social and environmental challenges. With this in mind, 51% of respondents say they want to see more impactful efforts in policy and lobbying efforts in the field.
As investing for positive impact and financial returns gains traction, the community’s public voice can grow stronger. This provides the impact investing community with a greater opportunity to speak up in the public sector for policy frameworks that can amplify their work to drive long-term solutions in areas such as affordable housing, access to healthcare, and regenerative agriculture.
Here, we share survey results and comments from impact leaders to examine how investors and others in the impact community can take aligned action for policies that help shape sustainable markets and encourage innovation.
Elections’ Influence on Impact Investing
The vast majority of survey responses indicated that elections in the United States and across Europe and India were the most likely to influence the field’s work. Free press, climate denial, and changes to regulatory bodies were mentioned as primary concerns related to those election outcomes.
Responses saying that the outcome of the U.S. election wouldn’t significantly affect their strategies or decision-making were consistent with the belief that impact investing is not limited to the U.S. political landscape. While respondents acknowledged that administrations could increase or decrease hurdles, most expressed that those would not be significant enough to warrant changes in strategy. As Jacques-Philippe Piverger, Founder, Chairman, and CEO of GoodLight Capital, said: “Generally speaking, I don’t anticipate the presidential election having a material impact on my decision-making. I think for those looking for an excuse not to participate, certain policies can significantly affect their activities.”
Those who acknowledge the influence of U.S. politics on the field said they have confidence in the purpose of the work driving progress. “I think approaches might be different, but I’ve found that the political center can come together around good policy that utilizes principles of free enterprise and capitalism to address social problems and benefit society,” said Jim Sorenson, Founder of Sorenson Impact Group.
That includes efforts to address income disparities through policy that supports initiatives like affordable housing and employee ownership, Sorenson said. “There are a few areas in policy that could make a massive difference in economic mobility in our society by helping to enable passive wealth-building opportunities for those left behind through investing in scalable market-based solutions for home affordability and homeownership, as well as ownership in the company you work for or participation in a managed 401(k) plan,” Sorenson said.
How Public and Private Entities Can Improve Collaboration on Issues in the Impact Space
The impact sector can tap into its strengths — creativity, connection, and long-term benefit — to amplify the combined efforts of public and private entities. Nancy Pfund, Founder & Managing Partner of DBL Partners, said that proactive collaboration with policymakers can accelerate progress on innovative solutions. “We must go beyond reacting to regulations and actively engage with policymakers and regulators early and often,” she said. “By sharing on-the-ground insights from portfolio companies and presenting real-world use cases, we can help shape policy and regulatory frameworks that encourage innovation rather than stifle it.”
The GIL survey also suggested that tax breaks, grants, and other incentives should better reflect the challenges faced by the private sector and that governments should work more closely with private companies to create effective incentives. Some referenced “providing carrots and sticks” for successful government involvement in achieving impact goals, marking incentives and regulations together as the solution.
Building connections among stakeholders is vital for the private sector to educate and guide the public sector in the creation of incentives and regulations, as the public sector is not always aware of emerging technologies or innovations. “It is incumbent upon private entities to engage with policymakers to share what solutions are being developed, where roadblocks are being encountered, and what support would make a difference,” Pfund said.
Public-private partnerships have the potential to accelerate the adoption of impactful solutions to challenges in sectors including regenerative agriculture, clean energy, transportation, and housing. “By demonstrating successful models of cooperation, we can help create a blueprint for how governments can support and help to broadly disseminate the innovations that will drive climate and societal progress,” Pfund said.
She added that the impact investing community can amplify its influence by forming coalitions that include not just investors and entrepreneurs, but also NGOs, think tanks, and advocacy groups. “By presenting a united front, we can bring greater visibility to key issues and create a stronger, more coordinated push for policy reforms that support the creation and deployment of technologies that solve our biggest climate and social challenges,” Pfund said.
Infusing Impact Strategy at Corporations Through New Models of Collaboration
Amid recent rhetoric around ESG efforts and regulations, a 69% majority of survey respondents said that the increasingly widespread adoption of ESG by investors is broadly positive for the impact field.
Karen E. Wilson, Founder and CEO of GV Partners and Affiliate Faculty at London Business School, said the growing ESG reporting requirements present an opportunity to move from compliance to establishing proper governance to help ensure corporations embed impact strategy throughout their organizations. “More training is needed for board members and senior executives to get them up to speed. The responsibility should not rest with one appointed sustainability/ESG/impact person on a board but should be embedded into the role of all.”
Going beyond reporting regulations to infuse impact and sustainability strategy throughout an organization can encourage more people to see the tie between ESG factors and long-term enterprise value, Wilson said. “While increased reporting requirements are helpful in terms of improving transparency, it has created a backlash due to the time, costs, and confusion generated. More critically, this has led to shifting mindsets to think that sustainability and impact is a reporting/compliance exercise instead of being strategic,” she said. “I have seen this mindset shift in the more recent cohorts of executives I teach. We therefore need to reinforce the message that impact is strategic and, in many cases, financially material to businesses. Leaders need to be more aware that they are making choices every day in terms of how much they consider their organization’s positive and negative impacts in their decision-making and those choices will have longer-term implications.”
Governments can also play a role in new models that align public and private goals with business innovation, including investing public money into early-stage technology or other new avenues. That partnership mindset can help impact investors, government, and other sectors to advance needed changes, said Chintan Panchal, Founding Partner of RPCK. “Historically, investing has had an extractive dimension to it. Whether it be in commercial lending or venture capital or private equity, the competitive, zero-sum, short-term, and extractive dimensions of investing have led to significant negative externalities and societal-scale challenges,” Panchal said. “Impact investors have an opportunity to prove the thesis that a partnering, trust-reinforcing, value-creating mindset has the ability to generate long-term, stable and successful outcomes. Thus, simply adopting the tools of the more extractive investing sectors can exacerbate existing challenges and paradigms.”
Advocacy for the creation of a global legal structure to track progress within the field can help entrepreneurs and investors focus on change-making work rather than bureaucratic processes, said Cliff Prior of GSG Impact. “We are now surrounded by regulatory reporting requirements, corporate disclosures, impact measurement and management systems, sustainability standards, impact transparency measures, and more,” Prior said. “Some of these are valuable, but a fair few simply overlap, and some countries take different approaches. Some developed countries are putting significant regulatory reporting burdens on SME companies in low- and middle-income countries, causing unintentional harm. We need to see harmonized systems for each area of activity.”
Read the full survey report for additional insights from Global Impact Leaders.