Impact Investing for the Next Generation: Insights from Young Members of Investor and Business Families
Since 2015, the Initiative for Responsible Investment (IRI) at Harvard Kennedy School has collaborated with the World Economic Forum in the Family Business Community and impact-investing domains on a programme called Impact Investing for the Next Generation. The specialized Center for Sustainable Finance and Private Wealth (CSP) at the University of Zurich was founded as a result and joined the collaboration upon its initiation in 2017.
The programme closes an important gap: highly specific training for cohorts of young members of high-net-worth families who want to learn about impact investing – that is, to integrate social goals into investment decision-making, in a trusted university environment, based on science and practice. Efforts such as this have substantial potential to advance sustainable development. More than half of all global wealth – about $140 trillion – is concentrated among such investor and business families.1 In particular, many younger family members have a deep desire to deploy their assets for the advancement of social and environmental sustainability. Yet opportunities for them to build their capacity, to learn about and discuss the topic in a trusted environment, are limited. Many are held back by a critical lack of trusted and practical information. This important barrier is, in part, due to the relative novelty of the theme – and misperceptions about it – as well as the prevalent secrecy in the private wealth space, which can hinder an open dialogue and flow of insights. As such, this unique and highly specific programme was developed, working annually with cohorts of approximately 25 young members of high-net-worth families. By 2019, around 100 participants had graduated. They came from all parts of the world, had a broad range of backgrounds, yet shared the desire of many young investors and business owners today: to develop an impact-investing capacity in their personal and family investments.
In this document, we share some insights from this work, with the intention of highlighting what is required from young investors, their wealth advisers and the wider community for the creation of a effective impact-investment strategy.