Impact investment is popular, rising almost 20% annually, with track records to impress both on shareholder performance, and intended impact. Almost every Family Office, Hedge Fund, and Fortune 1000 has extensive resources devoted to the pursuit of financial returns from social purpose. Every government and NGO is eager to collaborate with private social enterprises and are able to assist with resources and accommodation. Younger, more globally aware investors have normalized profit and purpose, as either a career, or an investment focus, and institutional money is beginning to see that it often outperforms to produce shareholder return. It seems that solving the world's problems has become a very good business model.
Yet, despite all of the growth, our investment activity is way off of what's needed for humanity to meet the UN’s 17 Sustainable Development Goals for 2030. To make it, we have to rapidy deploy a financial structure we have yet to invent, that will allow us to raise our investment levels in the projects and initiatives that allow us to meet humanity's goals. Empowering lives on that SDG scale requires, by some estimates, as much as $3.5 Trillion more than we are currently doing.
Do we have $3.5 Trillion available to humanity? It seems yes. In the Democratic Republic of Congo, by itself, one of the poorest nations on earth, we have 8 times the amount needed to fill that gap, just in that one poverty stricken country's wealth. We have money locked up in negative financial products losing value, quite literally burning money, the way we throw away food even though people are hungry. There are art and real estate assets sitting idle that can safely be deployed to sustain and fill that gap profitably many times over. The world's total available wealth is certainly in the quadrillions. There is no lack of wealth available for the project. What is missing is a workable agreement on how to unlock all that wealth and turn it into capital, safely.
However we evolved finance and investment over the last few hundred years, we somehow made investing in humanity to be the riskiest investment category there is. SDG and impact funding is an investment in humanity. It is an investment in a future way of (more sustainable) life for more of us. Yet, with the exception of green bonds, most of what is considered impact investment is done in a high risk venture capital model. Venture capital and angel investment, a playground of a high net worth society, is clearly not enough, as popular as it is. Time itself is now the real risk. Our reach has to become much broader, much more quickly.
As a purely practical matter, investments in human survival need not carry any risk at all. Human beings bring a proven built in return on investment, because all lives economically matter. Healthy economies run on people, and their ideas, coming together in agreement. The true risk, the loss to protect against, is an insufficient investment pool to feed that cause and stave off the existential risks we face. Taking no risk at all has now become humankind's greatest risk. That is best done together.
The risk problem is a prescription for a first-dollar loss insurance solution. We are developing it as a commons license methodology, designed to be rapidly replicated by impact investor producers everywhere, using the same pool of liquidity. This can result in them using a better focus of their highly valuable time on producing real impact solutions, than spending that same time on raising capital. This would be produced as a guaranteed bond layer, with fixed rates of return, and protected by reputable third party. This capital protected savings structure would allow small investors to safely engage in impact investments that also support saving humanity, the way people were enrolled to do when they were asked to invest in World War II war bonds.
We have the resources to do it. Small investors have capital to tap into, but there has never been any safety mechanism created to risk their savings and retirements in this effort. We can create a doorway, a safe risk-protected doorway, to unleash that economic power. When we do, we also make it safer for the current high net worth impact investor to invest greater multiples than they do today. That can make the impact investment sector grow, not just by 10's of percent, but by 100's and 1000's of percent, rapidly. Implementing this model will create a new savings system throughout the world, yielding a life-saving return on investment in humanity.
We have more than half of our criteria met to launch this program, in partnership with government, private capital, and insurance interests, and we welcome collaboration in the effort.