The global pandemic has put not only the U.S. but the entire world in a state of shock. The current public health crisis has turned lives upside down and caused massive market uncertainty, leaving citizens around the world grasping for solutions and gasping for hope. As we wait for relief from the crisis, we’re all asking ourselves: What can we do?
As investors, it’s always been our duty to assume strategic financial risk in the hope of creating both profits and solutions for the world. Impact investors take the risk of creating specific impacts because impact investments have the challenging variable that the company or project must have a proven positive impact on the world. Although it’s taken a long time to arrive, impact investing and positive returns are no longer mutually exclusive. In fact, the Dow Jones & Co. magazine, Barron’s, reported that 100 of the companies on their “America’s Most Sustainable Companies” list had average returns of 34.3% last year, when the S&P 500 had 31.5%.
Impact investing is all too often a rhetorical wave that never hits the shores of decision, action and reality. In 2019, Morgan Stanley published a report that showed that eight in 10 individual investors were interested in sustainable investing, but only 52% had actually made those investments. I challenge those who are still on the fence to consider investing in impactful solutions during this time of uncertainty, and here’s why.
1. We’re Experiencing A Desperate Need For More Efficient Systems
This pandemic has exposed a significant number of system failures across various industries; 94% of Fortune 1000 companies are experiencing supply chain delays. As the world population continues on the path to nearly 10 billion people by 2050, it’s imperative that we invest in solutions that will support such a large number of human beings, often living in concentrated populations with increasing mobility, all factors increasing risks to health. Building resilient systems across the world’s most important industries, like energy, water, food and health care will allow us to take care of our growing population of people and help prevent future public health threats.
2. We’ve Gotten A Taste of Clean Air, And We Know It’s Good
The reduction of air and auto travel, as well as reduced industrial activity and human activity resulting from stay-at-home orders, have greatly reduced air pollution in some of the world’s most polluted cities. China had a 40% drop in NO2 from 2019 in January and February of 2020, and the NO2 pollution in New York in March 2020 was reduced over 30% from March 2019. There’s no doubt that looking outside and seeing clear skies in spring is refreshing and an unexpected upside to a pandemic, and it reignited our conversations about climate change and pollution.