Vanina Farber & Peter Wuffli | “THE elea WAY: A Learning Journey Toward Sustainable Impact”
Episode 45, Feb 05, 2021, 12:00 PM
New Series
Today’s episode of IMPACT LEADERS is part of our new series called: “The Sustainable Investment Dilemma”
Today’s episode of IMPACT LEADERS is part of our new series called: “The Sustainable Investment Dilemma”
Looking into how industries can help address the Climate & Social Crisis, in particular the financial industry, taking on the opportunity to address the way it has financed the activities that have taken us to our current situation.
I invite you all to visit our sponsor’s website at ILAandPartners.com or the YouTube channel to watch the first video interview on this paramount subject and launch of this series.
About this Episode
To start our new series we have very special guests, Peter Wuffli, PhD, and Professor Vanina Farber, PhD, Founder and Chairs of the elea Foundation and the IMD elea Centre for Social Innovation.
They are also the co-authors of the newly published book “THE elea WAY: A Learning Journey Toward Sustainable Impact”, which they are presenting and discussing during our conversation.
FREE GIVE AWAY
Get a digital copy of The elea Way Book - Send us a message via CONTACT US page with Subject Line: The elea Way . ***Limited copies*** So hurry!
Professor Vanina Farber, PhD, is an economist and political scientist with 20 years of teaching, researching, and consultancy experience. She holds the elea Chair for Social Innovation at IMD. Previously, Vanina was Dean of the Graduate School of Business and Associate Professor at Universidad del Pacífico in Peru.
Peter Wuffli, PhD, is a senior leader and entrepreneurial philanthropist. He is the Founder and Chairman of elea Foundation for Ethics in Globalization and the Honorary Chairman of IMD. Previously, Peter was a partner at McKinsey & Company, the CEO of UBS Group and the Chairman of Partners Group, respectively IMD. In 2015, he published the book Inclusive Leadership.
The elea Way Book - The Learning Journey Toward Sustainable Impact
The new book by Vanina Farber and Peter A. Wuffli summarizes insights from elea’s 15-year pioneering journey, from creating an investment organization, choosing purposeful themes, and sourcing opportunities, to partnering with entrepreneurs for impact creation.
Elea Foundation
Elea was established in 2006 with the purpose of fighting absolute poverty (i.e. less than USD 3 daily income) with entrepreneurial means. Elea is a philanthropic impact investor in the fields of agricultural value chains, informal retail and last mile distribution, employable skill building and digital solutions.
Institute for Management Development (IMD)
The Institute for Management Development (IMD) is an independent academic institution with Swiss roots and global reach, founded 75 years ago by business leaders for business leaders. Based in Lausanne Switzerland and Singapore, IMD has been ranked in the Top 3 of the annual FT’s Executive Education Global Ranking for the last nine consecutive years and in the top five for 17 consecutive years. Their MBA and EMBA programs have repeatedly been singled out among the best in Europe and the world. The tag line is Challenging what is and inspiring what could be.
Elea was established in 2006 with the purpose of fighting absolute poverty (i.e. less than USD 3 daily income) with entrepreneurial means. Elea is a philanthropic impact investor in the fields of agricultural value chains, informal retail and last mile distribution, employable skill building and digital solutions.
Institute for Management Development (IMD)
The Institute for Management Development (IMD) is an independent academic institution with Swiss roots and global reach, founded 75 years ago by business leaders for business leaders. Based in Lausanne Switzerland and Singapore, IMD has been ranked in the Top 3 of the annual FT’s Executive Education Global Ranking for the last nine consecutive years and in the top five for 17 consecutive years. Their MBA and EMBA programs have repeatedly been singled out among the best in Europe and the world. The tag line is Challenging what is and inspiring what could be.
Highlights:
- Since the term was coined in 2007, there is now $500 -700 billion committed capital to impact investing.
- Social entrepreneurs are supported by organisations such as Ashoka, Skoll World Forum, WEF, Leaders of Tomorrow.
- Social entrepreneurship and impact investing are the two trends coming together bringing inclusive capitalism to solve and innovative solutions.
- I am a strong believer that capitalism is something great. Capitalism should be the solution and not the problem. But I also say we should make capitalism more inclusive.
- Talented people today want to work in companies that pursue meaningful purpose.
- Public expects capitalism to be articulated in a new way. We can do well by doing good.
- Every wealthy family particularly the younger generation is interested in these topics
- The elea Center for Social innovation focus on bringing social entrepreneurs with corporates
- Covid - All 20 active ventures survived. It was a humbling experience working with entrepreneurs through the pandemic.
- The pandemic gave us much more urgency and momentum. There is bigger recognition that systemic risks that are tail risks with low probability could happen.
- The idea of the system is much more concrete and the idea of interconnectedness becomes clear.
- The Elea Way Book allows for self learning, it is a practical and hands on book from a pedagogical perspective.
- It is the book that brings together social entrepreneurship and impact investing
- Standing on the shoulders of others - Bill Braden and Andy Kuper
- Bill Braden - CEO and founder of Ashoka - pioneer of social entrepreneurship
- Andy Cooper - Leapfrog, the first proof of an investment company that profit and purpose works.
- Fund managers should take a deeper look at impact.
- 3 phases of impact investment:
- $10k - Idea phase, competition
- $100k - Entrepreneur has to decide to fully commit, friends and family money not suffice. revenue of $0.5-2million
- - Not just concepts, building teams, working with government, 5-7 years
- Accion harnessing digital technology to create financial inclusion
- Examples of investments:
- InkaMoss - helping 6000 farmers, small farm holders in Peru
- Dharma Life - supporting entrepreneurship in 40,000 villages in India
- BagoSphere - providing digital courses to improve employability skills in The Philippines
- Encouraged to see that social entrepreneurship, impact entrepreneurship and corporates are coming together.
- “No hay mal. Que por bien no venga” - There are 100’s of methods but nothing that suited our purpose.
- The elea Impact Measurement Method was developed for for measuring of impact on absolute poverty specifically for elea. This takes into account - factors and elea impact points/1000 Swiss Franc.
- Impact points serve 3 purpose:
- To set goals - how many impact point we want to achieve
- For comparability between ventures - capital allocation tool
- To communicate regular performance reporting
- Investors are not just competing for more impact points but internalising the impact,more than just seeing images.
- Quantifying impact helps the decision making process and applies theory of change.
- At some stage, in 5-10 years, impact becomes tradeable. These kinds of currencies become real currency and maybe blockchain will help us here to create markets with impact. When we look at impact it is still traded at a discount. My dream is that one day impact will be traded at a premium not at a discount.
- They are not called donors, they are called philanthropic investors who give us philanthropic investors. They become by being on the board, helping with strategy and risk management.
- It’s not about creating bigger institutions and organisations. It’s about how to build partnerships, how to build bridges across sectors. It’s about getting different type of organisations aligned.
- Collaboration in blended finance needs to be more agile. We are starting to see SDG funds of $500million with blended finance facilities.
- Keys to leadership is intentional influence. Leadership needs to be ethical, be more horizontal than vertical, and is able to get things done and mobilise people around solving problems.
- We need to learn and be thorough. We have wasted a lot of money. Entrepreneurship is more critical and scarce now than money for impact investment.”
Time Stamp:
[0:02:40] Intro to Vanina and Peter
[0:05:20] What is impact investing?
[0:09:12] Are we facing a Sustainable Investment Dilemma? Capitalism
[0:11:20] Making impact vs making profit
[0:13:56] UBS philanthropic arm brought in higher quality conversations with wealthy people
[0:15:30] Spectrum of sustainable investing, impact and philanthropy
[0:17:30] What is IMD
[0:22:00] What is ELEA and why it was founded
[0:24:00] Elea Center and social innovation
[0:27:00] 10 years review and plan in 2016
[0:30:00] Launching a book in the pandemic in the summer of 2020
[0:35:00] The shift in urgency
[0:36:40] Writing the book
[0:40:00:] How to mobilise private capital,
[0:43:30] The two trends of social entrepreneurship and impact investing
[0:50:00] Practical and all inclusive book, limited give away
[0:51:50] 3 phases of impact investments
[0:54:30] Examples of elea investments
[0:57:00] Transformation in corporations, How to pivot during COVID
[0:58:45] “No hay mal. Que por bien no venga”
[1:01:10] Mainstreaming of impact and social entrepreneurship
[1:02:30] elea Impact Measurement Method and Impact Points
[1:06:00] Impact Performance Report
[1:10:30] Performance of elea investments
[1:16:00] Spectrum of capital
[1:16:45] Mindset of profit first or impact first
[1:19:40] Impact aligned organisations, ecosystems
[1:22:18] Blended finance is extremely promising but needs to be more agile
[1:24:45] Vanina’s career
[1:29:30] What is an impact leaders
Useful links:
Prof Vanina Farber Linkedin
Peter Wuffli Linkedin
Inclusive Leadership: A framework for the Global Era book
Bill Drayton, Founder of Ashoka
Andrew Kuper, Founder and CEO of Leapfrog Investments
Accion - Harnessing digital technology to create financial inclusion
Investment Companies
Serco - Donor to Elea
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