Wealthy philanthropic investors aiming to create social and environmental impact are relying on far more than just money, according to new research.
The study from the Center for Sustainable Finance and Private Wealth (CSP) at the University of St.Gallen and MIT Sloan Sustainability Initiative, noneconomic resources revealed that personal networks, reputations, and specialised knowledge play a critical but often overlooked role in driving change.
The Investor’s Guide to Multicapital Strategies involved 27 in-depth interviews with ultra-high-net-wealth impact investors from Europe, North America, Asia, and Australia, to map out how deeply engaged investors and philanthropists strategically deploy all their forms of capital – beyond just financial capital – to accelerate impact.
“Despite substantial amounts of financial capital deployed, the world moves backward on sustainability topics ranging from climate change to inequality and democracy,” said Dr. Kirsten Andersen, lead author of the report and director of research at CSP. “Treating capital as purely economic ignores the many other assets that influence outcomes, often more powerfully. Economic capital may open doors, but it’s social, symbolic and cultural capital that fill the room – with community, visibility, and knowledge.”
The guide aims to equip current and future wealth holders with actionable approaches to accelerate and amplify their positive environmental and social impact in the world through the systematic and strategic activation of all their forms of capital – including ethical approaches, transparency in decision-making, diverse voices, and accountability – principles that become even more crucial as wealth holders activate diverse forms of capital.
“If we want to have a real impact, we must use the range of tools at our disposal and commit ourselves fully to driving change,” said André Hoffmann, cofounder of the CSP Foundation and vice chairman of Roche Holding, and an interviewee for the guide. “Many wealth holders I speak with genuinely want to create positive change, but underestimate the influence they carry. This guide shines a light on the pathways they can take to contribute to a better world.”
Interviewees provided invaluable insight into their strategies. “If you get rich through capitalism, you have a responsibility to give back,” explains Urs Wietlisbach, a Swiss investor and one of the many interviewees whose values and early experiences inspire later decisions about philanthropy. Stories feature a lifetime of commitment to impact through all the pathways to capital. Entrepreneur Jeff Mendelsohn, founder of LocalCode, a regenerative development platform working in urban communities that have long been subjected to profound structural inequity, chose to position himself as a strategic partner to the local, Black female entrepreneurs with whom he cofounded the organisation.
“An undeniable element of harnessing multicapital strategies is humility,” said Mendelsohn. “Learning when to step up – and when to step back – allowed me to do the most good. Community leaders lead. Our role is to recognise that purpose and help amplify it.”
Michael Au founded District Capital, a venture capital and private equity firm, and chairs Toniic, a global network of over 500 high-net-wealth individuals, family offices, and foundations in 25 countries.
“Impact investing allows us to express who we are and live our values in ways that are truly transformative,” said Au. “To make a meaningful contribution to humanity and the planet, we must reimagine the world – and address the root causes of its most urgent challenges.”
Main image: nick-fewings-nd83DgVp4Oo-unsplash
