Blended Value and Measurable Impact Investing with Jed Emerson

Business, Impact Investing, Interviews, Social Enterprise, Talk — By on 08/17/2011 12:51

Leader in Sustainable Development: Jed Emerson

The Full Interview

Audio Only

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Currently there are a lot of people who want to invest in social entrepreneurs and make an impact but don’t have a clear way of valuing the work that is being accomplished.

Impact Investing gets into so much more than just the bottom line of the return on investment. The biggest issue at hand here is quantifying the value being created by the social entrepreneurs.

Jed Emerson joins today to talk about Blended Value, Impact Investing, Metrics, and Social Enterprise and his new co-authored book (highly recommended)- Impact Investing: Transforming How We Make Money while Making a Difference

Interview Notes

  • blended value, the future of impact investing
  • blended value – value cannot be bifurcated.
  • up until recently when you go into business, you have accepted that you either do well financially or do well philanthropically
  • blended value, says forget that, you can do both. you provide true value along the whole value chain
  • we’re in the middle of an evolution towards blended value.
  • the conversation began with compliance to environmental regulations.
  • in the 1980’s the idea of Corporate Social Responsibility showed up.
  • in the 90’s – more and more managers are coming to ask, how can I use these strategies to increase the bottom line as well as have positive environmental impacts
  • in 2010 – Michael Porter introduced Shared Value. Very warmly accepted his ideas, which shows the hunger within corporate american (and the world) to increase this market.
  • What has sparked this appetite for blended value and shared value.
  • the rise of climate change throughout the world.
  • the rise of epidemics like HIV/AIDS
  • basically, the world is now a very small place.
  • If you want to be a competitor you need to be very congruent within your organization to provide value throughout your value chain.
  • Mutual value is another term for bottom of the pyramid companies.
  • this is all getting at the bigger picture of what we value as society. so much emphasis has been placed on the financial bottom line. but now we are having to reevaluate what values are important to us as a society.
  • Understanding and measuring these values are perhaps the most important step forward that we can make as we evolve as people.
  • kevin jones
  • david hodgson
  • paul hudnut
  • how do you within a corporate structure allow for the creation of value and for investors to be able to get rewarded for taking risks in value creation at the same time that you recognize the fact that value is really fundamentally owned by the commons.
  • what are the ways that you can manage that value creation process and who benefits from it?
  • @12:10 are there any templates or scalable models that con be applied across verticals to produce this value creation?
  • IRIS is trying to quantify values
  • IRIS and GIIRS -where are they at currently?
  • We are in the developmental stage of measuring value
  • Impact Investing: Transforming how we make money, while making a difference
  • Antony bugg levine
  • a book that is impact investing for the lay person
  • first third, why? and where did impact investing come from
  • second two thirds. why bother?, what does this mean, the discussion of metrics.
  • Impact Investing is the vehicle through which we maximize value and the value is blended.
  • Hedge Funds role in impact investing
  • You can take a hedge fund strategy, infuse it with value chain investing, and take it to the market and be competitive
  • understanding the longing and shorting of a stock. Is it is a sustainable practice?
  • shorting can be seen as a fiscal, canary in a coal mine
  • the proof is in the fact that more and more hedge funds went public after the fall of Enron to show transparency and signal the market when they are shorting stocks
  • investing in public equities actually creates no value whatsoever. in essence all you’re doing is trading in arbitrage the perceived future value of a stock, you’re not creating value at the company level, you’re not creating jobs. in some cases you actually could be destroying value.
  • some investors argue that the only thing you should be doing is… you need to be putting your money into vehicles that are creating long term value. these vehicles
  • @ 27:20 Jed’s evolution from social worker to business expert
  • performance based funding
  • we need a better way to track how foundations are making a difference that way there is stronger incentives to improve performance and ultimately get funded again.
  • place economic value on the social impact
  • social impact bond
  • the biggest challenge is measuring things well. secondly, how do you value what it is that you measured
  • context plays a big role e.g. the locale
  • Check out Keystone
  • The center for effective Philanthropy with Paul Buchanan
  • @39:50 Rebecca Saltman!


Resources Mentioned

Jed’s New co-authored book with Antony Bugg-Levine  (highly recommended)- Impact Investing: Transforming How We Make Money while Making a Difference

The Center for Effective Philanthropy

About Jed Emerson

Jed Emerson has extensive experience leading, staffing and advising funds, firms, social ventures and foundations pursuing financial performance with social/environmental impact. He is an internationally recognized Thought Leader in sustainability and sustainable finance, impact investing, social entrepreneurship and strategic philanthropy. Emerson has played founder roles with some of the nation’s leading venture philanthropy, community venture capital and social enterprises.

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