New Class on Impact Finance for Sustainability Practitioners

by |March 29, 2018

MS in Sustainability Management Professor Bhakti Mirchandani

Bhakti Mirchandani, a new faculty member in Columbia’s Masters of Science in Sustainability Management program, will bring her diverse experience to the program in Summer 2018. Mirchandani, who first studied chemistry at Harvard College and then completed a dual Masters in Business Administration and Public Administration at Harvard Business School and Harvard Kennedy School, began her career in equity research before pioneering micro pensions and long-term micro savings at Women’s World Banking. She co-founded the Global Microentrepreneurship Awards (later Citi Microentrepreneurship Awards), sourced and marketed the first microfinance CLO without a public investor or subsidy while at Lehman Brothers, led the first microinsurance investment in India–LeapFrog Investments’ investment in Shriram–while at impact investment bank Unitus Capital, and built the North America coverage practice for global development organizations while at Barclays. Mirchandani’s financial transaction experience spans the capital structure and stages of investment.

Mirchandani currently is a managing director at FCLTGlobal, a nonprofit that works to encourage a longer-term focus on business and investment decision-making. She is an advisor, board member, or investment committee member of ACCION Venture Labs, Upaya Social Ventures, Contact Fund, and MicroVest Capital Management Enhanced Debt Fund. She also contributes as a freelance writer to publications like Nonprofit Quarterly and the Journal of Political Risk.

In the Summer 2018 semester, Mirchandani will bring her expertise to the classroom with a new course, Impact Finance for Sustainability Practitioners. Instead of separating investment strategy from environmental and social goals, impact finance harnesses the capital markets to drive positive environmental and social change. The aggregate $70 trillion of assets under management of the signatories of the UN-supported Principles for Responsible Investment are driving the integration of social and environmental commitments with asset allocation.

Mirchandani says the field of sustainability has typically attracted people who want to fight poverty and improve the health of our planet by finding innovative solutions to social problems. However, innovation must be counterbalanced with scale. As asset owners and asset managers alike demand large-scale impact investment products, impact investors must adapt their business models to increase the supply of such products and amplify their impact.

“Impact finance professionals are positioning themselves to capitalize on three significant opportunities: allocating capital to achieve the goals of the Paris Agreement, investing in the UN’s SDGs, and developing sustainable investing products that would be of interest to millennial heirs.”

First, there is an estimated $93 trillion cost to replace fossil fuel–powered infrastructure with low-carbon alternatives to achieve the Paris Agreement’s objective to limit global temperature rise to below 2°C. Some of this cost will be financed with green bonds and other sustainable finance tools.

Second, an executive at a large multinational described the UN’s SDGs as the “largest investment opportunity known to mankind”. Accordingly, numerous investors and corporations are aligning their investment and operating strategies with the UN’s Sustainable Development Goals (SDGs) to simultaneously address social problems and drive their bottom lines.

Third, $4 trillion expected to be passed down within a generation in the UK and North America alone to millennials, who tend to be interested in sustainable investing. These individuals are more likely than today’s baby boomer investors to be willing to use their capital to pursue the Paris Agreement’s objective and the SDGs.

For all of these reasons, Mirchandani views impact investing as important in the field of sustainability as a toolkit to turn long-term capital into results for people and for the planet.

Mirchandani’s new course will delve into the mechanics of seven impact investing tools and their policy contexts. Mainstream investment banking and investment management institutions, networks, experience, and skills are critical to catalyze the scale of impact investing. Students will study economic statecraft in the wake of Arab Spring and the fall of the Berlin Wall; Department of Labor guidance on economically targeted investments and ESG factors; federal budget cuts; changing IRS rules to allow foundations to consider the relationship between investments and the foundation’s mission; constrained local government finances; the Paris Climate Agreement; and evolving crowdfunding regulation at the same time that they master a mainstream finance curriculum. The course will cover the impact investment process from deal sourcing through closing and monitoring to exit.

The M.S. in Sustainability Management, co-sponsored by the Earth Institute and Columbia’s School of Professional Studies, trains students to tackle complex and pressing environmental and managerial challenges. Visit our website to learn more.

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