The US Impact Investing Alliance has called for the Biden-Harris administration to create a specialist bank to promote impact investing in infrastructure, among a raft of other policy proposals to create a more inclusive economy.
The IIA has partnered with B Lab, an impact certification non-profit, and 50 other philanthropic and social benefit organisations to launch a proposal for a White House Initiative on Inclusive Economic Growth.
One of the suggested policies is for the creation of a domestic development bank to flow capital into positive impact infrastructure projects and companies, Fran Seegull, executive director of the IIA, told New Private Markets. Impact companies and impact funds could receive “equity investments, technical assistance or loan guarantees as a way to build sustainable infrastructure”.
IIA also advocated for “a clarification of the fiduciary duty standards about the permissibility of investing with impact” for charities and foundations.
Andrew Kassoy, co-founder of B Lab, called for the Biden-Harris administration to “change the fiduciary duties and disclosure duties for charities and pensions”.
Pension funds’ interests are “aligned with [positive] social and environmental impact because that affects the economy as a whole and therefore the returns on their portfolios as a whole”. Pension fund managers need government policy that “makes it clear that ESG is an appropriate and necessary consideration” for the “best interests of their beneficiaries”, added Kassoy.
Pension funds and charities in the US may be prohibited from considering ESG and non-financial criteria under ERISA and UPMIFA laws. The coalition calls for clarification on this point.
More generally, the coalition seeks co-ordination between a variety of administrative offices including the NEC, SEC, DPC, CEA, CEQ, OSTP, NSC and OMB. The proposal is a five-page document with a broad range of policy ideas but does not specify definitive, actionable reform or legislation. Its launch “was a call to action for a unified office” in the White House for these goals, “and then you start getting into the individual policy proposals after that office exists”, said Liz Sessler, managing director of CapShift, a charitable investment platform.
Signatories of the proposal now hope to work with policymakers to develop these ideas into policies as the administration turns its attention from immediate pandemic relief to long term economic transformation.
Darren Walker, president of the Ford Foundation, one of the proposal’s signatories, said: “The last year has disproportionately affected African American, Latinx and other people of colour communities. This is a call to action to a White House that is poised for action and is looking for partners. We are committed to partnering with you and we look forward to working with you in the very near future.”