These challenges include inequality, poverty, lack of access to health care and education, and the repercussions of climate change.
And while, historically, it has been easy for investors to dismiss social impact investing, Mike Camfield, head of EMEA sustainability research at Morgan Stanley, said realisation was dawning on investors that the profound changes underway in society and the climate will drive the need for innovative, socially focused solutions in a number of sectors.
These include healthcare, finance and infrastructure, as well as significant challenges to resilience and adaptation for industries around the world.
Camfield said: “Increasingly, we do find investors recognize the vast and intractable social problems we face, whether that’s structural shifts in workforces with countries like Korea, Japan and large parts of Europe projecting working age population decline by double digit percentage in the next 15 to 20 years, significant growth in urbanization or growing middle class populations in countries around the world.”
Investors also increasingly understand the interconnectivity of stakeholders across society, whether that is supranational organizations or governments or the corporate world, or even citizens themselves.
“With huge shifts in demographics coming whether through urbanization or migration, aging populations in some countries or declining fertility rates, the investing landscape is set to change dramatically across sectors,” Camfield added during a recent podcast he hosted with Byrd, called Social Investing: The Future of Sustainability.
“[The change will manifest] in anything from shifting consumer preferences to education access and outcomes to greater need for assistive technologies, to substantial food production issues, to financial system access and inclusion, or even simply addressing rapidly increasing demand for basic services and clean energy.”
Some of the core themes in social investing include:
Access to health care, which includes but is not limited to pharmaceuticals, vaccines, orthopedics, medical devices, elderly care, sanitation and hygiene, women’s health and sexual health.
Nutrition and fitness, which encompasses things like infant nutrition, healthy or healthier food and beverage options, alternative proteins, food safety and food packaging.
Social infrastructure, which includes mobility, digital and communication systems, connectivity, health care and education facilities, community and affordable housing and access to clean energy.
Education and reskilling, which includes everything from pre-K, K-12, higher education, corporate and lifelong learning.
Inclusive finance, which encompasses microfinance, financial infrastructure, mobile digital banking, banking for underserved communities, fintech solutions and provision of financial services to SMEs.
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