Battered by the global financial crisis, global investment firms across the board have come to the realization that they need to reinvent themselves and re-evaluate their corporate values in order to survive over the next decade. While profit remains a major consideration for these companies, many of them now recognize that investing in a more socially responsible manner produces reputational and operational benefits — which, over the long run, could help protect their bottom lines.
This type of socially responsible investing is referred to by different terms — impact investing, shared value, inclusive capitalism and stakeholder capitalism are just a few. But what it essentially means is that financial firms are increasingly asking themselves who is really benefiting from their investments and what impact those investments are making on the communities they are working in.
“The private equity industry can be a force for good and a force for development,” Frederic Sicre, managing director of global growth markets investor The Abraaj Group, told Devex. Abraaj has $7.5 billion of assets under management and has investments in more than 150 companies in Asia, Africa, Latin America and the Middle East.