Aavishkaar Impact Report 2014: A Unique Perspective to Defining Impact
We started Aavishkaar with the belief that creating ventures in remote geographies would serve the needs of excluded communities and hence significantly impact society. Our faith in this simple thesis has gained strength over time and is evident in our recently released Annual Impact Report 2014.
Aavishkaar’s investment thesis defines impact as Aavishkaar's ability to take the risks of supporting disruptive ideas and building them to scale as businesses. Inherent to our impact thesis is the belief that the role of Impact capital is to educate and attract responsible mainstream capital to the impact enterprises. Our entrepreneurs build products and services that reduce the vulnerabilities of low income or excluded communities or generate livelihoods as producers, employees and partners. We believe that all credit for making on ground impact belongs to our entrepreneurs and we, at best, can document and report it without seeking any credit for it. As you read through our report these two critical aspects of our impact would shine through with stories of courage and grit from the entrepreneurs, and vibrancy of opportunities and their impact on society from our investments.
To support reporting and evaluation of our impact we have backed and supported the evolution of the PRISM tool (Portfolio Risk Impact Sustainability Measurement Tool) achieved through a pioneering partnership between Intellecap, our affiliate, and leading Global Development Finance Institutions such as IFC and GIZ. It has been developed to provide better insights into the linkages between the fund thesis and the impact it makes. Do visit www.prismforimpact.com to know about the tool and its implication for your fund and enterprises.
I wanted to conclude our discussion on Impact by sharing my experience of working with the International Development Working Group of the G7 Task Force. My key take away from the numerous interactions at the working group was that information asymmetry remains a significant issue across top global impact leaders. We need concentrated work to educate the world about the developments taking place in emerging economies around Impact Investing.
My other disconnect has been the relevance of the hype around the size of the Impact Investing pie. A significant part of the US $10 Billion or US $46 Billion (whichever number you take) is reclassified assets that have been doing good work. The real capital for Impact Investing with high risk appetite to support difficult ventures or innovative capital supporting new instruments that can scale impact remains miniscule.
I shared my concern and confusion with other global leaders, some of which I would like to share with all of you; Are we supporting a new movement called Impact Investing? Or is the objective of our coming together to consolidate and reclassify investments under Impact Investing with the objective to demonstrate scale and success of what has already been done before? My disconnect with the latter approach is that it continues to delude us about the Impact we are making while reclassifying old actions with new notions.
A better alternative is to look at and document capital flows that can make the change we seek and help scale the impact by attracting mainstream capital. We must differentiate and unbundle acts of Charity, Philanthropy and other forms of responsible investing if we are serious about Impact Investing as a new product. My conclusion is that till our research continues to hype the numbers and not their reality, we would continue to not serve humanity through Impact Investing.
We at Aavishkaar believe that an honest, transparent and forthright assessment of Impact that holds itself accountable is a must for the sector to thrive.
Please find here the link to the report http://www.aavishkaar.in/aavishkaar-releases-its-annual-impact-repo... for download and also a link to a new video we released on our work http://youtu.be/qhGfnsceeDM