While billions have been spent on direct efforts to bring the worlds of the haves and the have-nots closer together, perhaps the largest movement in history of people out of abject poverty was achieved over the last three decades in China. In that socialist state, capitalist practices created vast riches for a few but also new wealth for millions of workers. The resulting improvements in living standards, however, were an almost collateral outcome, and they were not achieved without a large degree of social and ecological disruption.
What if investors were intent on using the mechanism of the free market and the power of the economy to improve social and environmental outcomes from the outset?
That is the challenge thrown down by a new development model that seeks to turn the power of the market economy to social good. So-called impact investing puts private capital to work jump-starting for-profit entities or supporting nongovernmental organizations with the intention of creating fiscal profit that can be tracked in accounting books but also a social profit that can be observed in improved living standards or environmental conditions in developing nations around the world. Impact investing was the focus of a conference on June 16 to 17 in Rome, sponsored by the Pontifical Council for Justice and Peace, Catholic Relief Services and the Mendoza College of Business
of the University of Notre Dame.
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