The Importance of Private Directed Impact Investing

Many people don’t realize the impact pollution and climate change have on our environment and ultimately our health. The news focuses mostly on immediate catastrophes that occur in a short period of time. The effects of pollution and climate change are slow but still very significant and should be taken seriously.

Energy is a complicated subject. It is the world’s largest market and it is not easy to change entrenched links in the chain. Everything is interconnected in energy and the energy industry was long resistant to change.

Nevertheless, green energy comes with many benefits and creates a synergy between generating profit and benefiting the environment. Renewable energy sources help to improve air quality and therefore our health, by supplying electricity or heat without combustion.

According to a report by the International Renewable Energy Agency (IRENA) unsubsidized renewable energy is now most frequently the cheapest source of energy generation.

The report states that the cost of installation and maintenance of renewables, which was an important stumbling block to mass adoption, continues on a downward trajectory.

Clean energy is now the cheapest source of new power generation for more than two thirds of the world and has no fuel costs. It has the ability to reduce the economic burden of energy bills by eliminating expensive fuel charges.

How to fix our environment with private directed impact investing

The reality is that most people who get hired by companies to fill the position of a chief sustainability officer are oftentimes professionals who have an outstanding reputation but lack actual experience in the field of impact investing. They have been involved in charity work for sustainability, have held positions at the White House or worked at the United Nations. These people know a lot about all the international proclamations of sustainability, but the reality is that they have no experience in making an investment.

Applying ESG criteria to public portfolios in index funds isn’t going to change the world fast enough. What ultimately has an impact are specific investments.

The way the world is going to be made better is by private directed impact investing. 

For example, investing in a specific energy project such as a new solar plant. It immediately provides electricity and allows for diesel generators to be turned off. To change the world, you have to make specific targeted investments. All the major investment companies like Black Rock are all focused on public securities and public index funds. They have less than 1% of their assets focused on private impact investing, but that’s what’s needed.

In the past, the process of sustainable investing often fell short of its goals. We have the experience and the know-how to re-design the process for better impact, greater system efficiency and higher returns on strategic investments and initiatives.

At Transformation we invest only in extraordinary profit situations where there’s at least a market return on equity. We combine strategic advisory services and project development to help family offices, sovereign funds, and private companies capture extraordinary opportunities at the inefficient frontiers of agriculture, energy, and water, integrating the latest technologies to achieve lasting profit while maximizing efficiency and impact and transforming the world.