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Q&A with Jed Emerson: How Can Impact Investing Help Environmental Entrepreneurship Grow?

The Global Impact Investment Network defines impact investments as “investments made into companies, organizations, and funds with the intention to generate measurable social and environmental impact alongside a financial return.” Few people understand that concept better than Jed Emerson.

A recognized international leader in the field of strategic philanthropy and impact investing, Emerson has spent more than two decades exploring how capital investment strategies may be executed to create multiple returns. Currently, he is Chief Impact Strategist at ImpactAssets, a senior fellow with Heidelberg University’s Center for Social Investing, and a senior advisor to the Sterling Group in Hong Kong. In 2011, he co-authored the book, Impact Investing: Transforming How We Make Money While Making A Difference, the first book published on the topic of impact investing. We caught up with Emerson to discuss how impact investors can help developing market entrepreneurs increase their economic, environmental, and social impacts.

1) If you were in an elevator with a promising developing country environmental entrepreneur, what would be your advice on how to lock-in investment (whether from the traditional or impact investment community)?

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The Challenge of Strengthening Environmental Entrepreneurship

This is the first installment of a five-part blog series on scaling environmental entrepreneurship in emerging markets. In forthcoming posts, experts in the field will provide insights on how business accelerators, technical assistance providers, investors, and the philanthropic community can work with developing market entrepreneurs to increase their economic, environmental, and social impacts.

One of the greatest challenges of our time is achieving economic development without harming the planet and local communities. Entrepreneurship can play a critical role in solving this dilemma.

In fact, entrepreneurs and the small and medium enterprises (SMEs) they create contribute up to 78 percent of employment and more than 29 percent of GDP in developing economies. These types of businesses play an invaluable role in creating jobs, spurring community growth, and alleviating poverty. Some of these SMEs create even more value by generating clear, measurable environmental benefits.

But the problem is that these entrepreneurs face a host of challenges when it comes to growing their businesses and succeeding. As Global Entrepreneurship Week is celebrated across the world this week, it’s a good time to examine the importance of environmentally focused entrepreneurs as well as the difficulties they face.

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New Ventures

Voices of the Entrepreneurs

“Voices of the Entrepreneurs” is both a celebration of what New Ventures has achieved so far and a springboard to its future. This report highlights the experience of 32 New Ventures entrepreneurs and provides valuable insights into the challenges that hinder the growth of environmental...

3 Companies that Are Making Money by Embracing Sustainability

Superstorm Sandy and the subsequent Nor’easter were the biggest news this week and last. The combination of two powerful forces resulted in unprecedented and widespread damage. Our thoughts are with those who have been impacted.

I can’t help but draw the connection between our recent extreme weather and businesses today—corporations are increasingly recognizing that they, too, are navigating two powerful forces. One force demands financial results, while the other requires increasingly sophisticated techniques to respond to climate, energy, resource scarcity, and other sustainability risks. The ways businesses navigate both these forces will determine whether they are truly viable over the long-term.

3 Pioneering Businesses Focused on Profits and Environmental Stewardship

On the eve of Hurricane Sandy, I moderated a Net Impact conference panel titled “Driving Bolder Investments in Sustainability.” This panel brought together representatives from Waste Management, Intel, and Pepsi to discuss how sustainability is no longer an add-on, but is becoming core to business planning. These three companies are incorporating environmental initiatives in order to shield themselves from business risk and boost their profits.

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Companies and MBAs Test New Sustainability SWOT

At last week’s Net Impact conference, WRI challenged teams of attendees to come up with what was essentially a “mashup” of megatrends and environmental challenges. The teams then engaged in a friendly competition to see who could create the most innovative corporate sustainability strategies for a hypothetical company modeled after LEGO.

The teams began by looking at global environmental challenges (like clean energy, climate change, and waste removal); then connected these hurdles to other big trends (such as urbanization and social inequality); and finally, assessed strategic actions for the model company. The result was a handful of very clever corporate sustainability strategies. One team suggested that 3D-printing and materials science could enable the company to produce toys in growing markets using bio-based plastics, thereby reducing shipping costs and greenhouse gas emissions. Another team thought that creating visual instruction guides could help overcome language barriers and promote affordable green building design and construction. And the winning team proposed partnering with companies like Coca-Cola and non-profit organizations like 5 Gyres to reuse plastic waste in the world’s oceans (similar to what Method and United by Blue are currently doing).

The proposals varied greatly, but all the teams had one thing in common: They used WRI’s new Sustainability SWOT (sSWOT) as a guiding framework to shape and communicate their strategies.

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Why Businesses Must Focus on Climate Change Mitigation AND Adaptation

This week, Hurricane Sandy drew attention to the increasing climate-related risks for communities and businesses.

More and more companies are recognizing and reporting on actions they’re taking to “mitigate” climate change, reducing greenhouse gas (GHG) emissions through energy efficiency, renewable power, and cleaner vehicles. Now, businesses are finding they’ll also need to “adapt” to more volatile conditions and help vulnerable communities become more resilient. Adaptation means recognizing and preparing for impacts like water stress, coastal flooding, community health issues, or supply chain disruptions, among other issues.

WRI discussed why businesses need to embrace mitigation AND adaptation strategies at the recent Net Impact conference, where I sat on a panel entitled: “Climate Change Adaptation: Mitigating Risk and Building Resilience.” Dr. David Evans, Director of the Center for Sustainability at Noblis, moderated the panel. Other panelists included Gabriela Burian, Director for Sustainable Agriculture Ecosystems at Monsanto, and John Schulz, Director of Sustainability Operations at AT&T.

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WRI Launches Project on Climate Finance and the Private Sector

The Intergovernmental Panel on Climate Change (IPCC) estimates that our best chance of containing global temperature rise to 2°C is to keep atmospheric concentration of carbon dioxide below 450 parts per million (we’re currently at 390 ppm). In addition to several other climate mitigation strategies, sticking to this cap will require significant new investment in low-carbon infrastructure and activities in developing countries.

Experts estimate the cost of funding this development to be about $300 billion annually by 2020, growing to $500 billion by 2030. The problem is, there’s a huge funding gap when it comes to meeting these costs—industrialized nations have only committed to mobilize $100 billion of new funds annually by 2020 to meet these needs. The world will need to figure out a way to come up with the rest of the funding if we’re going to prevent developing nations from feeling climate change’s most severe impacts.

Introducing WRI’s Climate Finance and the Private Sector Project

Tapping into the private sector is one way to bridge the climate finance funding gap. The World Resources Institute’s new Climate Finance and the Private Sector (CFPS) initiative has been designed to specifically address how the public sector can leverage private investment in a low-carbon future.

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3 Lessons for Better Supply Chain Management

This post originally appeared on Forbes.com.

What do three leading chemical, automobile, and software companies have in common? All three – Honda, BASF, and SAP – are looking to curb risks and take advantage of opportunities across their global supply chains. They’re doing so by measuring their greenhouse gas emissions—not just in their operations, but up and down their value chains.

Many other multinationals are heading in the same direction. The Carbon Disclosure Project’s (CDP) annual survey of the Global 500, released last month, reveals that seven in ten respondents measured some value chain emissions in 2011, up from about half in 2010. (Note this figure is based on WRI’s analysis of the 405 companies that submitted data to the CDP 2012 survey data.)

What’s driving the world’s biggest corporations down this path? In a nutshell: reputation, risk, and opportunity.

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Pavan Sukhdev Discusses 4 Ways to Create More Sustainable Corporations

“To tell the story of the corporation is to tell the story of a grand bargain gone awry,” says Pavan Sukhdev in his new book, Corporation 2020: Transforming Business for Tomorrow’s World. It’s a bold statement, but he backs up his claim persuasively. While many companies are reaching record profits, they’ve oftentimes come at the expense of ecological degradation, rising greenhouse gas emissions, unemployment, spikes in food and fuel costs, and social inequalities.

But Sukhdev has developed what he believes is a framework for shifting the private sector towards a greener, more equitable economy. WRI recently hosted Sukhdev at our Washington, D.C. office to discuss his new book and his vision for the future. The founder of GIST Advisory and former head of UNEP’s Green Economy Initiative joined a panel discussion with WRI’s Managing Director, Manish Bapna, and Naoko Ishii, CEO of the Global Environment Facility.

“Pavan has written a remarkable new book,” said WRI’s president, Andrew Steer, who opened Wednesday’s event. “It not just a book, but really a campaign to change corporations in four viable ways.”

The 4 “Planks” for Corporate Sustainability

Sukhdev’s framework for shifting the private sector towards greater social and environmental sustainability includes what he calls the “four planks of change:”

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