Impact Investing in Germany

Björn Strüwer is founder and CEO of Roots of Impact, creating solutions and cross-sector partnerships for effective impact investing.

He is also senior advisor to Ashoka on social finance, co-founder of the Financing Agency for Social Entrepreneurship (FASE) and initiator of the Ashoka Angels Network. Björn has more than 20 years of experience in the finance sector. Until 2013 he was Managing Director of Credit Suisse and is actively engaged in developing solutions for responsible investments, social finance and impact investing for many years.

What current developments in Impact Investing are you observing in Germany?

In general the market is in its infancy. But we recognize a development in the right direction. For example the ecosystem for Impact Investing is constantly growing, the first Social Impact Bond was implemented, the Financing Agency for Social Entrepreneurship (FASE) has been established successfully and the first foundations are engaging in Mission Investing. Nevertheless, for a real breakthrough the government has to take action and support the early movers in creating a market. We at Roots of Impact are active globally and see it as quite obvious that Germany could adapt successful and proven models from other countries – not one to one but taking the typical German environment into consideration.

With regards to a growing Impact Investing Ecosystem, what are the biggest challenges?

A huge amount of capital around the world is waiting to be invested for social and environmental impact. Yet too little of it makes its way to high-impact social enterprises. In my view,

the challenge is not about raising more funds for impact investment. It is about building a market with practices that really achieve their intended purpose. It takes a while to build this ecosystem with intermediaries, experts, supporters and market places.

Right now we have to ensure that the focus on impact remains central in impact investing and build up the necessary environment for that. To exploit the full potential of impact investing, we have to think and act in cross-sector partnerships. Public and philanthropic funds can be combined to attract and “crowd in” private capital for scaling high-impact social enterprises.

How can “traditional” Investors be convinced to focus on Impact?

I am not sure if this is really desirable. Everybody is asking with the best of intentions: What is necessary to make this sector a trillion dollar market? From my perspective, this is not the first and most important question. We think impact investing should not be seen as an end in itself. It is not about moving money, it is about making a difference. The powerful influence of institutional capital could drive the social enterprise and impact investing field towards the lowest common denominator, not the highest.

We have published about this issue here. Maybe it is more promising to convince public authorities and also philanthropists to adapt and support the practice of impact investing – with a rigorous focus on real impact.

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