Unreasonable’s Jasiel Martin-Odoom on the rise of ethical investments
Is capitalism a dirty word? Not for the new breed of investors who are demanding that companies use their financial force for good. These “conscious capitalists” aren’t ashamed to see their investments soar, but they want to play their part in solving the world’s biggest challenges. This boom in conscious capitalism isn’t just some idealistic notion. By collaborating with banks and NGOs, global corporations can deliver real social impact. It’s the only way to bring about real change. The young are waking up There’s no doubt that younger investors are more switched on to how their money is being used, and they’re looking to make meaningful choices. These are people who might have seen their parents lose jobs and homes in the 2008 financial crash, they are the first generation born into the tipping point where climate change became a crisis and their concerns have been illuminated by the COVID pandemic. And now they’re rejecting greenwashing for real change as they look to spend and invest with ethical businesses. Let’s start doing things differently Some of the startups I’ve seen in the Unreasonable Collective doing great work around the pandemic are born out of capitalism and the desire to make a change for good. From clean drinking water to COVID vaccinations, the needs of communities around the world have shifted during the pandemic and the call for change has become even more urgent. When Unreasonable partnered with Barclays to offer grants to startups addressing these issues we expected change. Fast change. But even with our big ambitions, we were overwhelmed by the success of the innovations that came out of that collaboration.
The India Rural Access Coalition saw Frontier Markets Consulting, Vitargent and EduBridge come together to build healthcare resilience in remote communities. Providing COVID testing was just the start. They also worked with rural entrepreneurs to boost their businesses.
“By collaborating with banks and NGOs, global corporations can deliver real social impact. It’s the only way to bring about real change”
At the same time, Biolite Energy and Angaza were bringing clean, solar energy to 120,000 people across sub-Saharan Africa and this is a project that will run and run. Barclays provided 20 grants of £100,000, but when you look at what the startups did with the money, it’s worth so much more in terms of changing and saving lives.
Many companies feel a nagging need to do good, but there’s a difference between paying lip service to the idea and taking action. At Unreasonable, there’s very little ego about what we do. We want to give innovative, high-growth companies and entrepreneurs the collaborative tools they need to learn from each other and drive change. This move towards aligning investments with values means shareholders will want more from the balance sheet in future. As well as looking at the figures to see if their money is safe, they want to know that a company isn’t doing damage to people and the planet. I’m seeing a lot of opportunities in sectors such as clean energy, agricultural technology and waste management. There’s a lot of traction around wind and solar energy at the moment and I see the boom in electric vehicles as a microcosm of how things could go. They’re an indication of a bigger trend and I’m looking forward to seeing clean energy take off. If COP26 taught us anything, it’s that we need to work together and we don’t have time to waste. But wait – have we forgotten about diversity? Conscious capitalism has its eye on what’s happening in the world as well as the balance sheet, so no one can ignore the need for more investment in female and Black-owned businesses. Early-stage investing in Black-owned businesses has gone up from 2% to 8%, but these are still small percentages and I don’t envisage much development on this in 2022. But the glimmer of hope is we are trending towards change. It’s not that those Black-owned businesses aren’t out there, investors have to be intentionally looking to put capital in these businesses. For every 10 businesses, even if we invest in one that’s more diverse things are going to be incrementally better. The desire to change is there. And Unreasonable will do everything we can to drive it.