What is Impact Investment and ESG Metrics?

In today's rapidly evolving investment landscape, Impact Investment has emerged as a beacon of hope, particularly for addressing social and environmental issues like global warming, drug trafficking, and illegal migration. This investment approach, while ensuring positive financial returns, transcends traditional short-term capital gains. It concentrates on generating long-lasting positive social and environmental impacts in low-income countries endowed with strategic environmental resources.

Central to this strategy are impact metrics, primarily focusing on Environmental, Social, and Governance (ESG) factors. These metrics provide a comprehensive framework for identifying promising investment opportunities, especially pertinent to Biocenosis Capital. Our emphasis is on Latin American Small and Medium-sized Enterprises (SMEs) that promote positive change in areas such as biodiversity, sustainable agriculture, education, and tackling gender and social inequalities, all while sustaining financial viability.

Impact Investment

At its core, impact investment is about channeling capital to projects and enterprises that can make a real difference. It's not just about profit; it's about purpose. This form of investment targets companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return. In low-income countries, where traditional funding sources are often scarce or come with stringent conditions, impact investment can be a game-changer.

As the world becomes increasingly interconnected, the actions we take, or fail to take, in one part of the globe can have far-reaching consequences elsewhere.

For investors looking to make a difference, the message is clear: investing in positive impact SMEs in low-income countries isn’t just a good deed; it’s smart economics. It's an opportunity to be part of a solution that benefits not just individual companies or countries, but the entire planet.

We must seek out investments that are not just profitable, but purposeful. It's time to put our money where our values are and become active participants in shaping a more equitable and sustainable world.

• Impact investments specifically direct capital towards projects and enterprises that have a positive environmental impact.

• Unlike traditional investments that may prioritize short-term gains, impact investments have a long-term view.

• Impact investing encourages companies to adopt more sustainable business models and practices.

• Because most of the world population and natural resources are in the Global South, it's fundamental to invest primarily there.

Our investments are an extension of our values

As we navigate this complex investment landscape, it's vital to remember that our investments can be an extension of our values. This means seeking opportunities with clear and demonstrable impact. We can achieve this by investing directly in projects or companies that address pressing issues like climate change, social inequality, and the root causes of illegal migration in low-income countries.

My honest opinion about ESG ETFs & Funds

In the realm of modern finance, Environmental, Social, and Governance (ESG) investing has taken center stage, presenting what appears to be an ideal intersection of values and value. ESG ETFs and funds have proliferated, promising investors the golden opportunity to align their portfolios with their principles. However, as we delve deeper, a critical question emerges: Do these ESG solutions truly make a tangible, traceable impact in addressing global warming?

“ With more funds labeling themselves as 'sustainable' or 'green,' it becomes increasingly challenging for investors to discern genuine ESG commitments from mere marketing tactics. ”

As a former Portfolio Manager at one of the most prestigious banks in Belgium, I was initially enthusiastic about the EU-SFDR regulation concerning Sustainable Finance. But when confronted with how it was presented to clients and the composition of ESG funds that included companies like Total Energies, my enthusiasm quickly waned.

My primary concern with listed ESG investments, such as ETFs and funds, is their lack of traceability and transparency. Investors often find themselves in the dark about where their money is going and whether it's genuinely making a positive impact on the lives of real people — people with faces, names, and real locations. When you invest in these ETFs, your only certainty might be about whom the fund management fees went to. If we want to reverse climate change, mitigate migrations, and curb illegal businesses such as human and drug trafficking, this gap in information must be addressed.