EARTHY: A balanced impact investment approach

A BALANCED IMPACT INVESTMENT APPROACH TO ECONOMIC, ENVIRONMENTAL AND SOCIAL CHALLENGES

InBC ready to invest with its triple bottom line mandate

JILL EARTHY

To tackle some of the biggest challenges of our time, we need new ways of thinking and new models to support change. Here in British Columbia, we are seeing the drastic affects of climate change through extreme weather, as well as rising interest rates and a high cost of living connected to a shifting economic environment. Many businesses that have experienced tremendous growth over the past few years, particularly in the technology sector, are struggling as evidenced by recent layoffs.

InBC Investment Corp., a provincial Crown corporation, was created to be a different model of financing, taking a balanced approach focused on people, planet and profit. This triple bottom line mandate is outlined in the legislation passed in May 2021, which established it as a corporation, and is now being put into action as InBC forms its operations and begins investing. Its recently approved investment policy outlines four impact objectives, including: ■ Elevating inclusive communities; ■ Driving climate action; ■ Advancing reconciliation; and ■ Innovating for the future.

As an impact investment fund, InBC incorporates global impact investing standards to screen for investments that can demonstrate and measure how impact and inclusivity is embedded in business models, alongside the potential for financial returns. This aligns with current market conditions, which are prompting both investors and entrepreneurs to re-examine risk and value, and to recognize a more balanced approach to growth.

The emerging trend to balance sustainable and profitable growth is a correction from the previously celebrated growth-at-all-costs model. Recognizing this approach will drive positive change, including elevating more underestimated founders, many of whom are already operating this way.

InBC will begin by investing in venture capital funds, focusing on early stage companies aligned with at least one of InBC’s impact objectives, and that has a strong connection to British Columbia.

InBC will support both established and emerging fund managers to further expand the innovation ecosystem in the province. Starting in 2023, InBC will explore opportunities to invest directly in private companies. Its emphasis on innovation goes beyond the technology sector, extending to any sector or industry innovating for a clean and inclusive economy, including health, agriculture and the transition of traditional sectors.

InBC will also partner with other public and private funders to increase local capital sources for B.C. companies. In 2021, B.C.-based companies received the least amount of Canadian capital compared to companies in other provinces. By growing the local capital pool, companies that start in B.C. are more likely to stay and grow in the province, creating lasting economic benefits, including job creation and retention of intellectual property. When local investors invest in B.C. companies, the financial returns generated cycle back into the local economy. We have a significant opportunity in B.C. to think differently and to lead with innovative financing models to generate broad impact.

Through a collaborative, impactful and profitable approach, InBC is in position to enhance the innovation ecosystem and support the growth of strong, sustaining B.C. companies that are solving our most pressing issues. The result of this balanced approach will be a stronger economy for British Columbians.

Jill Earthy is CEO of InBC Investment Corp.

WE HAVE A SIGNIFICANT OPPORTUNITY IN B.C. TO THINK DIFFERENTLY AND TO LEAD WITH INNOVATIVE FINANCING MODELS TO GENERATE BROAD IMPACT