According to the United Nations say it will take between 5 and 7 trillion dollars every year until 2030 to meet the goals of sustainable development worldwide. In recent years there has been an awareness that such goals can only be achieved through the effective involvement of the community, individuals, companies and institutions. Sustainability and positive impact have been identified as issues that even a for-profit company can focus on. Social impact is today a growing market: the number of companies with social impact is growing, impact investing is increasing, the whole ecosystem is growing according to this approach.
We talked about it with Marco Fabio Nannini, CEO of Impact Hub Milano, Certified Incubator with social impact and Senior Advisor of FabriQ, the Social Innovation Incubator of the Municipality of Milan. Nannini is also a member of Toniic, the most important Impact Investor network worldwide, co-founder of some startups, and business angel.
What is the overall context for social impact initiatives?
Analyzing the Social Impact sector worldwide, it is clear we are in an extremely positive historical period. Investment in this sector has in fact accelerated considerably in recent years, as shown by the increase in capital to support social initiatives. It is worth emphasising the important role Europe is playing in this respect. The European initiatives in terms of sustainability outline an important intervention by some banking institutions, which have taken the initiative to open funds aimed solely at supporting Impact initiatives. Some examples are Credit Swisse with the raising of an Impact Investing fund of 500M$, and JP Morgan, which established a Social Finance unit in 2007 and has been active for several years in social initiatives (including, on the other hand, the Scaling Program in the Impact Hub network). Again within Europe’s borders, institutional mentoring increasingly supports Impact Investing. Among the main institutions, I’d like to name the launch of the three European EUSEF funds in Germany and France, entirely focused on Impact Investing or the creation of the Social Impact Accelerator, aimed at co-investing in Impact Investing funds.
How we doing in Italy?
Italy can play a leading role in this respect. The sound system of scientific and technological skills, together with a third sector capable of combining a consolidated social commitment with significant entrepreneurial skills, is at the basis of Italian potential in the Social Impact area. The support provided by incubators and accelerators to entrepreneurial initiatives in the Impact area is essential.
And which role can companies play in Impact Investing?
Of course, Impact Investing should not be seen as the evolution of traditional Corporate Social Responsibility, but rather as the evolution of ethical and responsible investment. While CSR is based on the idea that a positive impact requires additional costs, sacrifying part of the Return on Investment and investing heavily in communication, Impact Investing becomes a real opportunity for the investor, with higher ROI and margins. This is the result of the strong growth in demand for sustainable products and services and the general willingness of customers to pay a premium price. For investments with a social impact, therefore, reference is made to a proactive intention whereby the investor pursues the corporate purpose together with economic return.
Incubators play a very important role in supporting up-and-coming business initiatives. How does the support of Impact Hub come about?
The Impact Hub global network was created with the aim of promoting and supporting high-impact activities. The main purpose of the network is to offer its members a unique ecosystem of resources and opportunities to work together and increase the positive impact created by their work. To date, the network recognizes about 16,000 members and more than 100 venues worldwide. Impact Hub Milano (IHM) opened in 2010 and four years ago was recognized as a certified incubator, the first in Italy with a focus on social startups.
We are well engaged with all Impact Investing initiatives, such as outreach events, direct investments and incubation/acceleration activities. In particular, we have several important initiatives in three areas:
– Impact Park, an international event on Impact Investing, with over 400 participants, 60 speakers among investors and entrepreneurs of the sector, including personalities such as Julia Balandina, expert and author of “Guide to Impact Investing”; Ibrahim AlHusseini, founder and managing partner of FullCycle Energy Fund; Robert Rubinstein, founder of TBLI; Riccardo Sabatini, the Italian DNA genius who enchanted TED and Charly Kleissner, founder of Toniic;
– Impact Angels a group of Business Angels investing in high-impact startups. Born a year ago, today it has already invested twice (Mukako and RiCompro) and a further 3 investments are under evaluation;
– IHM Acceleration, a call for equity that includes €250,000 in incubation services and financing equally divided between 5 selected projects. Today the call is in its third edition and has been a great success in the first two editions. The programme aims to support the growth of projects up to the Ready to Invest phase. In the first two editions, very interesting projects have been developed. Among these, there is undoubtedly FeatFood, whose activities focus on the preparation and delivery of healthy and balanced meals, experiencing a rapid expansion in Milan area. Wishraiser, which proposes to VIPs and Influencers to raise money for NPOs through lotteries, raffling an experience with them. IHM currently has a portfolio of more than 20 startups, proving that the Impact Investing segment is booming.