2017 was no doubt a politically turbulent year. Donald Trump managed to make headlines all year, from the controversy with Russia influencing the U.S. election to Steve Bannon, White House Chief Strategist in the Trump administration, being fired from the White House, to Michael Wolff’s Fire and Fury becoming the #1 bestselling book on Amazon. There is a lot of uncertainty in the air in the global political arena: tensions with North Korea have escalated, no progress has been made with Brexit talks, the Catalan independence push is still unresolved, and civil wars continue in Syria. In addition, the natural disasters this year have been unprecedented in scope and cost. Hurricanes Harvey and Irma had devastating impacts on Texas, Florida, and parts of the Caribbean; South Asia has suffered from some of the worst monsoon flooding in years; and there have been heatwaves and wildfires in many parts of the world, including the Thomas Fire, set to become the second-largest wildfire in California history. Hurricane Harvey is expected to be the most expensive natural disaster in US history, with estimates of costs as high as $190 billion. This warning sign for the future has prompted action amongst both global leaders and local cities. 

The stock markets tell a different story. Global equity markets have risen above unsettled politics and devastating natural disasters. The Dow and S&P 500 reached record highs in 2017 and have seen straight gains for the past 6 days. The S&P was positive every month in 2017 for the first time. In general, economic conditions have continued to be favorable and companies have seen improved earnings. And the tax cut is expected to significantly benefit corporations and continue to boost investor confidence in the short-term. But not all companies will benefit equally: technological advances are impacting every sector and the pace of disruption appears to be accelerating. Companies embracing technological changes and investing for the future are likely to be the most successful.

The transition towards renewable energy and a low-carbon future has been encouraging. Renewable energy costs have continued to decline; the cost of solar panels has declined, and improvements in materials technology have driven the cost of wind projects down to new record lows. Electric vehicles have been a clear trend, projecting to make up 30 percent of new vehicles by 2030. China, the world’s largest market for clean-energy vehicles, is leading the transformation. China has joined Norway, France, Britain, and India in announcing plans to end the sale of petrol and diesel cars, which could happen as soon as 2030. Data and software such as cybersecurity and the “Internet of Things” are on the rise as we become a world more connected to each other and to our devices. 

The amount invested in social and environmental impact has significantly increased. According to the Global Impact Investing Network (GIIN), in 2016 $114 billion was pointed towards impact compared to $77 billion in 2015, and a broader set of “sustainable” and “responsible” assets, including public equities and green bonds, hit $23 trillion, up 25% in two years. In 2017, impact measurement went from an overhead cost to a strategic imperative. Investors are beginning to manage their impact performance with the same quantitative, data-driven approach they apply to financial performance.  

And market-rate returns are achievable! In fact, I strongly believe that investing in gender equality and developing countries, in the environment and renewable energy, in data and technology, will have just as high, if not higher, and more sustainable returns in the long-term. Looking at environmental sustainability, economics will likely play a larger role than politics in the transition to a low-carbon economy. It has become increasingly clear that our economy and society will suffer in the long run if we do not invest in the future, in supporting sustainable agriculture practices that will help feed a growing population, in tackling climate change and its consequences, which we are already experiencing. Significant investment, in the trillions of dollars, will need to be mobilized to achieve sustainable development goals.

Fortunately, we are moving to direct investments toward these goals. The possibilities of impact investing are limitless: funding for women entrepreneurs, fin tech startups helping low-income people and businesses obtain crucial loans and afford long-term debt, solar panels in rural India, mini-grids delivering electricity to remote areas in Africa (1 billion people globally still don’t have access to reliable electricity), the alternative protein market; investing in emerging markets such as Central America and Caribbean that lack capital for entrepreneurs and essential services for the poor; investing in projects that promote forest conservation, water management, sustainable agriculture, and coastal resilience (poor fisheries management around the world means foregone economic benefits of about $83 billion a year, an environmental, social, and economic issue for people who depend on coastal resources).

There is no doubt about it, the impact investing movement is growing. As more and more investors and corporations start investing for certain types of companies, others will start to pay attention. And there is no more opportune time to join the movement than now. 

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