ESG, Impact and Strategic Philanthropy: passing waves or a path of no return?

Check out the highlights of the live conducted by Leonardo Letelier, founder and CEO of Sitawi, and Gustavo Pimentel, Executive Director of the organization. 

“The ESG and Investment Impact lens makes a difference when it gains critical mass. These products need to be scaled to achieve an impact on the real economy”, pointed out Gustavo Pimentel in the live promoted by Sitawi on the 11th of August. Together, the executives provided an overview of the trends and directions of ESG, Impact and Strategic Philanthropy ecosystems, as well as the relevance and role of society and finance within these contexts. 

In the view of the leaders, although much credited to the pandemic, the rise of ESG criteria - acronym for environmental, social and governance - had already been sewn in the wake of international commitments since 2015, with the Paris Agreement and the launch of the Goals of Sustainable Development (SDG) of the UN. Since then, the movement has continued to expand in the financial and corporate markets worldwide. According to S&P Global Ratings, sustainable bond issuances in the world are expected to reach U$700 billion this year. In Brazil alone, there are already more than R$45 billion by August and the Sitawi estimates at least R$60 billion at the end of the year.

“If you look at the other segments of the Brazilian financial market in 2020, such as equity, credit and private equity, many players have launched ESG and Impact products or approaches, which do not necessarily have to do with the pandemic and were already being cooked for a while. before”, says Gustavo. The agenda began to appear more expressively in 2018, driven in part by international pressures, but also by the demand for ESG products from local wealth management, he concludes.

From the Impact point of view, Leonardo reinforces that although the “ESG tsunami” has expanded its narrative during the pandemic, the different approaches to impact have also been strengthened and its relevance has become clearer for society encompassing various actors, such as investors, impact entrepreneurs and supporting organizations.

In this dimension, the trajectory of Impact Investment in Sitawi, which has already mobilized more than R1TP3Q16 million for socio-environmental impact businesses, endorses the change in investors' mindset by the possibility of aligning their investments with impact organizations. Through the Collective Loan Platform, launched in 2019, the Sitawi started to provide investment opportunities with financial return and purpose for Individual investors and, on the other hand, expand access to patient capital for initiatives with the potential to generate positive socio-environmental impact. 

Another topic addressed was the boom of philanthropy in the face of the emergency of the COVID-19 pandemic, exceeding R$7 billion in donations in the country. Given that it encourages discussion about the culture of donation in Brazil being more focused on times of emergency, than in the form of recurring donations. In this scenario, the growth of initiatives such as the Philanthropic Funds has shown that it is possible to do philanthropy in a strategic and structured way, with collaborative actions that aim for more lasting effects.

“The world we want will be built on the basis of work and investment, but also on votes and donations. Donation is the capital that has the greatest capacity to create impact. We have growing space for more structured philanthropy, not just emergency philanthropy,” adds Leonardo.

The full conversation is available here on our YouTube channel. 

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