Giving Compass' Take:

• Investors can take precautionary steps to understand how their funds are being used and ensure that communities are benefitting from investments. 

• What are the challenges in terms of transparency and impact investing?

• Here are three ways to engage in impact investing.

Impact investors have an obligation to look into the people side of their sustainable investments, and can take steps to ensure that local communities’ rights are respected by:

  • Doing due diligence. The Business and Human Rights Resource Centre links to dozens of sites that focus by country and industry sector. Also, when investors find something that needs improving, they need to commit time and money to resolving the challenges.
  • Supporting NGOs working on these issues. Organizations like the Aliança da Sociedade Civil Contra a Usurpação de Terra em Moçambique, Women’s Association to Promote Community Development, Lutheran World Federation, and Action Aidare in this for the long haul, and need moral and financial support.
  • Investing in real alternatives. Community livelihood programs run by organizations like Justiça Ambiental and the Gorongosa Park’s Carr Foundation provide income and economic development opportunities to rural communities that put local interests above profit and resource extraction, including technical assistance to smallholder farmers, community-managed forestry, piloting sales of local products like water hyacinth and coffee, and ecotourism.

Read the full article about sustainable investments by Heather Grady at Stanford Social Innovation Review.