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How Impact Investing Can Change the World

Impacting Investing
Investing in the right organizations has the potential to change the world. Impact investing is a type of investment that focuses on social or environmental benefits as well as financial or capital returns. Impact investing can be done through for-profit or nonprofit organizations that are looking to improve the world. It can be done in emerging or developed markets anywhere in the world as part of a growing market that provides capital to address global issues in sectors like “sustainable agriculture, renewable energy, conservation, microfinance and affordable and accessible basic services including housing, healthcare and education,” as the Global Impact Investing Network (GIIN) says. The market is estimated to be at around $502 billion as of April 2019.

According to GIIN, there are four primary characteristics of impact investing:

  1. Intentionality – The intention is one of the main things that differentiates impact investing from regular investing. The intention behind impact investing must be the desire to create measurable social or environmental benefits.
  2. Use evidence and impact data in investment design – Investments must have evidence or data that indicates the investment will have social or environmental benefits.
  3. Manage impact performance – Investments must be managed toward the specific intention of the investment. This would mean having feedback loops and means of communicating performance information to ensure that the investment is working toward the intention of the investment.
  4. Contribute to the growth of the industry – Impact investors must use shared industry terms to communicate their goals, strategy and growth. They also share information so that others may learn from their experience and adjust their investments accordingly.

Examples of Impact Investments

  • The Omidyar Network – Pierre Omidyar, the founder of eBay, and his wife Pam obtained large quantities of wealth after the company went public and wanted to do some good with it. He set up a limited liability company (LLC) to make investments in early-stage innovations that are able to generate profits. He also set up a 501(c)3, a tax-exempt nonprofit, to provide grants for public goods and assistance to disadvantaged communities as well as subsidize the production of beneficial goods. The use of both of these allows the Omidyar Network to use for-profit capital and nonprofit grants to benefit society.
  • Actiam Impact Investing – Actiam Impact Investing invested in Pro Mujer Bolivia, an organization that provides training and financial services to women in Bolivia. Janeth Villegas is one of many women who benefited from the program. Pro Mujer taught Villegas a number of skills including accounting and business management which empowered her to start her own chocolate company that she is now teaching her kids to run.
  • Salkhit Wind Farm – Impact investors invested capital in Salkhit Windfarm, the first renewable energy generator connected to the central grid in Ulaanbaatar, Mongolia. The installation of this wind farm has reduced coal burning by 122,000 tons annually and has created over 3,000 local jobs.
  • General Electric – General Electric (GE) provides impact capital through its Ecomagination Accelerator to finance energy conservation efforts. Ecomagination investments totaled $1.4 billion in 2014. “We want to inspire more companies to work together and tackle the world’s greatest resource problems,” Ecomagination’s global executive director Deb Frodl said. With this goal in mind, the company also aims to decrease reliance on fossil fuels in order to reduce greenhouse gas emissions.
  • d.light – This for-profit company invests in and manufactures solar energy and distributes its products through the developing world. d.light’s mission is “To create a brighter future by making clean energy products universally available and affordable.” The focus here is on providing clean energy to the developing world which helps reduce dependence on fossil fuels and provides electricity to people who might not otherwise have it.

– Sarah Faure
Photo: Wikimedia Commons

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d.light Solar Energy

D-Light Solar Energy
An estimated 1.3 billion people live without access to electricity globally. In the 21st century, access to electricity is almost as important as food and water; it is undoubtedly a lifeline for the economic and financial health of any nation.

Inaccessibility to electricity hinders economic growth, as well as impacts the standard of life in regions without electricity, crippling the human capital as well.

The link between access to electricity and poverty has long been established. Modern technology is, more often than not, dependent on electricity.

From successful farming and production of sufficient food to education resources and the creation of industry, electricity is the prerequisite for numerous facets of life. The United Nation’s Millennium Goals also identify the importance of electricity in eradicating global poverty.

Despite the significance of electricity in today’s world, many developing countries struggle to find solutions to the problem of accessibility of electricity. To address the problems of electricity shortage, we have to ask what the reason for this shortage is.

The primary cause of the unavailability of electricity in most regions is the lack of technology to produce electricity or the lack of resources used for its production, such as coal, gas and water dams.

Solar energy is currently being touted as the cure-all to the energy woes of the world. Solar energy is a renewable source of energy and is also ecologically sustainable.

Although it is by no means the most energy-efficient in terms of the ratio of available energy to harvested energy, solar power is abundant in developing countries and can be harnessed for generating electricity.

Recently, the development and provision of solar-powered devices to low-income countries have gained momentum. Programs like Solar Electric Light Fund and Solar Sisters work to empower the populations living in extreme poverty through the provision of electricity and related resources.

d.light is also one such initiative. Its goal is to provide electricity to people in developing countries. According to its estimates based on its customers’ feedback, d.light has helped more than 50 million people worldwide with its program.

d.light was initially developed as the brainchild of Sam Goldman, who saw the dangers of kerosene usage for lamps in East Africa. He partnered with Ned Tozun to find d.light in 2006, which operates principally in East Africa and India.

d.light manufactures solar lamps and solar chargers, which are compact, mobile, safe and incur no recurring costs. Its products are also designed to be efficient, yet inexpensive and long-lasting. d.light’s solar lamp, S2 — at $8 apiece — has the distinction of being the world’s most affordable, high-quality solar light.

The impact of these solar lights is not only financial but environmentally significant as well. Approximately 4 million tons of carbon dioxide production usage have been offset to date.

The solar lamps have cumulatively saved $275 million for families who previously spent 10 to 15 percent of their earnings on kerosene. The program has also created job opportunities by creating a local market for importing and selling d.light’s products.

d.light has sold more than 10 million solar lamps to date. Its goal is to reach 100 million people by 2020. With a dedication to providing affordable, efficient and safe electricity to millions of people in developing countries, d.light is set to realize its objectives and improve millions of lives.

– Atifah Safi

Sources: D.light, Acumen, World Energy Outlook, Global Envision
Photo: Pixabay

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Innovation and Affordability: d.light Solar

d.light solar
The company d.light manufactures and distributes solar lights and other products to people around the world. Currently, 300 people work to complete the goals of d.light: give reliable energy to 100 million people by 2020. Aside from providing power, d.light notes that reliable power also contributes to better performance in school and better overall safety and health.

Nearly one and a half billion people around the world live without access to electricity. For a fifth of the population, the light switch that most people use every night does not exist. Most people without access to power live in regions with the highest rate of poverty: Southern Asia and Sub-Saharan Africa.

Many without access to power use kerosene lamps. But these are polluting and harmful to the people who use them. Burning one for four hours a day for one year results in 100 kg of carbon dioxide emissions, which contributes to climate change.

For individuals, using kerosene lamps can cause severe respiratory problems. If these health problems do not cause death, they severely limit access to jobs, which limits income and continues the cycle of poverty. As a demonstration of the importance of consistent electricity, it has been shown that household businesses with better lighting have a 30 percent increase in income, simply because it allows people to work at night.

The kerosene lamps are also extremely cost inefficient. LED lights produce almost 100 times more wattage than kerosene lamps. But without other options available, a significant portion of individual or family income goes toward kerosene lamps. Merely limiting access to modern technology results in dangerous, and possibly fatal consequences to people in poverty.

In 2004, Sam Goldman witnessed the effect of kerosene lamps when one burned his neighbor in Benin. This personal contact with the effects of limited access to electricity inspired Goldman to educate himself on sustainable and affordable innovation. During this time, he met Ned Tozun. Together, they created d.light, “an international social enterprise serving households without access to reliable electricity.”

d.light provides products such as study lamps, family lanterns and light systems with a phone charging capability. The products are powered through solar energy and can provide light for up to 15 hours. Indicating that the company knows its consumers, the products are versatile and can withstand the effects of weather or other uncontrollable factors.

As of July 31, d.light has empowered over 37 million lives, given solar lighting to almost 10 million children and saved over $1 billion in energy expenses. For each consumer, buying a d.light product can save approximately $150 over 5 years. Moreover, d.light positively impacted the environment by reducing carbon emissions by nearly 3 million tons.

Witnessing the dangerous affects of limited access to energy, two individuals created innovative yet accessible methods to address a problem associated with poverty. The innovation of d.light helps to alleviate both a cause and a consequence of an enormous issue. The benefits of d.light Solar evidences the significant potential impact of ensuring that people in poverty have access to innovative products.

– Tara Wilson

Sources: CNN, Acumen, d.light Solar
Photo: Discovery