Oihane Aldayturriaga, Cristina San Salvador and Josu Oleaga, protagonists of the last session of the ‘B-Venture Pills’. /
More and more voices are calling for the private sector, which moves five times more capital than philanthropy and the State together, to get involved in solving social or environmental problems
After a first failed attempt, in 2019 Spain achieved its integration into the Global Steering Group for Impact Investment (GSG), the working group founded six years earlier by the G8 to promote social impact investment. That is, private investment in companies or tools that propose solutions to social or environmental problems. Despite the fact that in these three years Spanish capital has gone from 230 million to 2,400, it is a trend that is still incipient in our environment, but in other countries it is gaining weight as an instrument to achieve the Sustainable Development Goals (OSD) of the UN and the last session of the ‘B-Venture Pills’ was dedicated to her, the meetings around the largest forum of ‘startups’ in the north of Spain that will be held next month.
The meeting offered the public attending the Espacio EL CORREO the opportunity to hear the opinions of Cristina San Salvador, director of Venture Philanthropy & Expansion at the Ship2B Foundation, and Josu Oleaga, co-founder of Insekt Label, a startup that investigates new ways of obtain nutrients from insects and provide them to the human food industry in the form of flour and which participated in the 2020 edition of B-Venture, in a debate moderated by Oihane Aldayturriaga, head of the Entrepreneurship, Talent and Innovation Area at BBK, who , given the use and abuse of the term, specified that “when we speak of ‘impact’ in the world of financial investment, we refer to the achievement of measurable improvements in the fight against a certain problem”. Therefore, it should not be confused with socially responsible investment, which, although it takes into account compliance with social, environmental and corporate governance values of the companies in which it invests, does not require it to solve any problem related to the OSD from the ONU. “There are those who have put figures on how much it would cost to achieve these goals by 2030 and the estimate is that there is an annual deficit of 2.5 trillion euros, a gap that makes private investment seen as fundamental,” Aldayturriaga explained.
“No state has the economic capacity to solve these enormous social problems that we all have in mind. And neither do philanthropy or social entities have the economic resources to go where the State does not. It is, therefore, more necessary than ever that, as Michael Porter said in 2013, the private sector, which moves five times more capital than philanthropy and the state combined, gets involved,” San Salvador summarized to contextualize the issue. Obviously, when it invests, the private sector seeks to obtain benefits, and depending on the priority it gives to these with respect to the achievement of social objectives, we speak of one type or another of impact investment.
«There are investors who are looking for a 50-50, but at the other extreme, there is the ‘venture philanthropy’ (which we could translate as philanthropic venture capital), where if you have to choose between profitability and objectives, the first one wins. They are investors who are aware that there are projects, such as job placement for certain groups, that cannot be supported by donations or offer returns, and they decide to put their money into them in exchange for a return of 2% after ten years or even just waiting the return of the capital or assuming a debt later sometimes finally transformed into a donation. In other words, just as they could make a donation from the beginning, they decide to cede part of their assets for a time to these projects to ‘force’ them to show the impact of their activity with measurable indicators », he explained.
«From the point of view of a ‘startup’, positioning is never easy. There is a time when you have to prioritize between the search for that impact (and the investor who helps you achieve it) or the need for gasoline that the project may have at a given time and, with it, from an investor who does not have the impact as the first objective”, added Oleaga.
His firm, which in the medium-long term could offer a response to problems such as dependence on grain from Ukraine, had in a first phase the support of a philanthropic program “without which we would not be here now” but at this time it does not count with any investor with this profile. “Impact investing is becoming more professional and the demands are going to be the same or more than those of a traditional investor,” he assured, warning that the fact that immediate results are not prioritized does not imply a lack of control over the impacts that the investment must generate. business.