Giving Compass' Take:

· Nick Sramek and Greg Wendt share insights on the construction of a new framework to bridge the gap between traditional finance markets and impact investing. 

· How can this new framework create positive economic returns for investors? How can it link financial markets with impact investing? 

· Here's more on impact investing and philanthropy.


Despite efforts to bring the two closer, impact investing and traditional finance suffer from a misalignment challenge. Since the goals of traditional finance are inherently separate from the qualitative dimensions of values-based investing, creating mechanisms to bridge the gap has been ineffective up to this point. A new framework is needed – and is currently being constructed. All investors must coalesce around principles that have been with us for millennia; the same principles that dictate a natural order have the power to build long-term profitable companies, positive economic returns for investors, resilient communities, and sustainable ecosystems.

Expanding the role of finance is necessary to build long-term resilience which must start with multi-layered systems thinking. Listening to the needs of communities, cities, companies, investors and bioregions – the building blocks of a sustainable society – as a tree listens to its roots – will allow for far greater alignment between companies, investors, communities and the environment. For all of these building blocks, creating systems that have a 100-year vision must be the goal (to create the necessary preconditions for the intergenerational transfer of true prosperity). Taking a long view of how we live today and want to live in 100 years – and perhaps 10,000 years – has the power to not only stave off negative externalities but also repurpose our current systems for a greater good.

Read the full article about impact investing by Nick Sramek and Greg Wendt at Ethical Markets.