By Paul Allard
impak Finance - the independent impact rating agency
Chief Ecosystem Officer
Let Me Introduce You to This Topic...
Why did I get involved?
Early in my entrepreneur career, I had to deal with the world of finance, and rapidly felt that something was wrong about our system. So, I decided learn all about it: money creation, roles of central banks, investment banks, rating agencies, insurance companies, etc., historic evolution (or degradation) of regulations, financial product creation, etc.
What I discovered is that today, 97% of the money created in the world is created by private banks, and 85% of this capital is invested in speculative financial products. In other words, we are in a world where we create money to create money.
The consequences of this system?
Global inequality is at its peak, and 60% of the biodiversity has disappeared over the last 60 years.
Redirecting capital towards the impact economy
Our Financial Economy needs to transform into an Impact driven Economy. To do so, we need to re-direct money flows – spending, investing and banking - towards economic agents that seeks impacts and not only financial returns.
The challenge? To really identify the net impact of any organizations.
A Mandatory Impact Balance Sheet
Let’s keep in mind that every single human organization has negative environmental and/or social impacts, and some of them creates positive impacts. (hopefully more and more of them!)
So we have to STOP separating “responsible investing”, “Charity giving”, “Social Enterprise Investment”, “impact investment”.
What we need is to have a clear view of the net impact of all organizations in order to make impactful choices!
So I am convinced that it will soon become mandatory, for EVERY ORGANISATION, to publish their impact statement alongside their financial statement.
Based on a universal, transparent and holistic standard (similar to the IFRS), those annual impact statements will give a true picture of the net environmental and social impact of any organization – private, public, SME, multinational, for profit, NGOs, States, Cities, etc.
The growth of the Impact Economy
It is only through a mandatory impact statement that every economic agent (citizen, professional money managers, bankers, professional buyers, states, cities, etc.) will be able to make the conscious decision to buy from, invest in and lend to organizations that adapt and take into account the environmental and social risks and challenges of our society. This is creating the right context to accelerate at scale the transformation towards an impact driven economy.
It is only through genuine transparency that change-makers can make the right choices and massively channel capital (spend, invest and bank) towards those organizations minimizing their negative impacts and growing their positive impacts.
And it is only through genuine transparency that we can avoid greenwashing and impact washing.
Paul's Reading List
A MUST read: The epic successor to one of the most important books of the century: at once a retelling of global history, a scathing critique of contemporary politics, and a bold proposal for a new and fairer economic system.
de Jeremy Rifkin
An urgent plan to confront climate change, transform the American economy, and create a green post-fossil fuel culture.
VIDEO: Richard Werner: Today’s Source of Money Creation
Not only Mr Werner has fully understood how our economy and financial markets work, but he has also the courage to speak up and clear. This is not what you learn in school! And you should understand this…
About the Author
With civil engineering studies and a music degree in hand (cello), my first career was in the entertainment business. Specialized in musicals as a performer, (Les Misérables, Gala, etc.) I also got involved in theater, television and movie production. At one point, I went back to school and did my MBA at HEC. I then launched my first tech start-up that I brought public on the TSX in 2000. Since then, I got involved in 3 other going public transactions, raised over $45M, did around 12 M&A transactions. I led innovative multi-disciplinary teams in Canada, France, UK and Mexico, always involved in disruptive technology development.
Early in my entrepreneur career, I had to deal with the world of finance, and rapidly felt that something was wrong about our system.
All of it led me to founding impak Finance, which mission is to bolster the growth of the impact economy.