To discuss the theme of the Impact Investing Specialization Track, TFF Next Gen Council Member Caroline Steiblin conducted a short interview with Kirchner Group’s Kirchner Food Fellows: Karla Rascon-Garcia, Adrian Garcia-Casarrubias, and Alfredo Costilla-Reyes.
Adrian, a Plant Biotechnology PhD candidate at CINVESTAV-IPN in San Pedro Zacatenco, Mexico, explained the importance of the dual impact model for impact investing. Companies that prioritize both generating revenue and profit, as well as achieving some level of social, environmental, or cultural impact are the key focus – the idiomatic “doing well by doing good.”
Karla, a PhD candidate in Epidemiology at the University of California, Davis, believes the increased interest in impact investing is due to its “holistic” nature.
Choosing to invest in dual-model companies means evaluating potential options through additional and stricter criteria. Accordingly, this can deliver better results – research has shown that these companies do not just have wide impact scopes and hone social and natural capital, but also some generate higher profits, and have shown internal rates of return above those for similarly sized “traditional” funds.
Alfredo, a PhD candidate in Electrical Engineering at the Dwight Look College of Engineering at Texas A&M University, discussed how stakeholder collaboration can improve the effectiveness of impact investing.
Governments and other public sector institutions can advance their goals through the efficiency of the private sector, and private sector partners can benefit from portfolio diversification and smaller investment amounts. Individual consumers act to influence public interest in impact investing, and can gain increased awareness on the sourcing of their products.
Alfredo also mentioned the existence of boundaries limiting the current success of impact investing. Difficulties in accurately measuring impact (versus purely financial measures), restricted access to impact investing funds, and the struggle for new start-ups, especially social start-ups, to follow the dual-model are only some of the key challenges that need to be addressed.
The group agreed that the partnership between the Kirchner Food Fellowship and Thought For Food can help moderate these boundaries.
TFF’s global platform position the Foundation to be a great talent acquisition tool, finding and developing start-ups concentrating on food security with high potential. The Fellowship shares the skills and best practices required for impact investing decision-making with its Fellows, who apply their knowledge to TFF’s Finalist teams. The Fellows mentioned that their involvement with TFF is on-going – they are looking to both advise teams interested in their expertise, as well as support a project financially through a prize investment at the TFF Summit to aid in its employment of the dual-model.