AllLife, the only insurer of people living with HIV/AIDS in South Africa, is accustomed to making the impossible possible. The firm was created to insure people without access to affordable life insurance — people who were previously viewed as uninsurable. That might not sound like a formula that investors would jump at. But the company’s mission was in sync with that of IFC client LeapFrog Investments: to support “purpose-driven businesses with real social impact.” Following on a $13.9 million investment from LeapFrog, AllLife has expanded its team, opened a second call center, launched new products, and more than doubled its revenue.
The pursuit of investments that can generate a measurable positive impact on society — while also generating positive returns for the investor — is proving its worth. Although the market is still relatively small, measured in billions, the potential is enormous. Investor appetite could be as much as $5 trillion in private markets — private equity, nonsovereign private debt, and venture capital — and as much as $21 trillion in publicly traded stocks and bonds, according to the IFC 2019 report Creating Impact — The Promise of Impact Investing. Realizing this potential depends on the creation of investment opportunities and vehicles that enable investors to pursue impact — and financial returns — in sustainable ways.
As one of the world’s largest impact investors, IFC has a decades-long track record. We are shaping the impact-investing market as it becomes a large-scale force for good. This year, with partners, we developed the Operating Principles for Impact Management, establishing a common discipline and market consensus around the management of investments for impact. These impact-investing principles reflect best practices across a range of public and private institutions and integrate impact considerations into all phases of the investment life cycle: strategy, origination and structuring, portfolio management, exit, and independent verification.
But that’s not all. Accountability is key, so the principles require annual disclosure and periodic independent verification of how they have been implemented. This offers investors additional confidence and enhances the market’s credibility. As of June 2019, 63 institutions had signed the principles — creating for the first time a market standard for impact-investing management.
See www.ifc.org/DevelopmentImpact/OPIM for IFC’s disclosure statement on impact.