Impact investments, an alternative approach to sustainable development

The impact ecosystem is becoming increasingly relevant in the country, demonstrating its ability to mobilize private capital on a large scale to contribute to solving social and environmental challenges at the national level.

Some key milestones that prove it: More than 1,000 companies that have adopted the BIC (Societies of Benefit and Collective Interest) figure, including the creation of the GSG-NAB Colombia to promote impact investments.

According to the latest report from the National Development Agency (ANDE), (Impact Investment in Latin America, trends 2018 – 2019), 16 investors reported investing $67 million in Colombia in growth-stage companies in sectors such as agriculture (58% ), financial services (11%) and microfinance (9%), with financial return expectations adjusted for market risk.

In addition to the above, Colombia has been a pioneer and reference in the region in implementing pay-for-results schemes such as Social Impact Bonds. Three have been launched in the country: Employing the Future, Cali Progresses with Employment, and CREO.

“Impact investing represents a paradigm shift in investment decisions, identifying opportunities that balance social and environmental impact and financial return, and help solve the social and environmental challenges we face,” said Juan Pacheco, manager of the GSG -NAB Colombia.

Likewise, the director added that “this model represents the potential to close the financing gap of the Sustainable Development Goals and the gap between the supply of private capital and the demand for investment.”

It should be noted that as of December 2020, 54 impact private equity funds have invested nearly USD 153 million (Colcapital) in Colombia.

Source: El heraldo

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