Impact investment is changing the world.
Today, environmental and socially conscious investors are leaving a lasting legacy of net social impact while also earning considerable returns.
Earlier in this decade, many wondered if it was truly possible to support the public interest and earn substantial returns on investments well exceeding the principal.
Today, while the paradigm of impact investment is still growing, the results are clear: amazing things happen when investors are able to align their values with projects that allow them to leave a lasting mark on our world.
There is a clear reason for this: impact investors have access to type of value which is not available to other types of investors. This value is derived from the emotional alignment investors, management, customers and other external stakeholders have with the corporate structures which are able to recognize all of their interests in tandem.
Impact investors create the impetus for real action and accountability to be the driving forces which lead to measurable results and career defining achievements.
When companies align their organizations towards clearly defined social and environmental impacts, real changes become possible.
Will your organization take a stand against the effects of rural poverty?
Largely based in Latin America, the Caribbean, Sub-Saharan Africa, Asia, North Africa and the Near East, the rural poor make up approximately one-fifth of the global population.
More than two-thirds of the most impoverished people in the world carve out unimaginably challenging lives farming or working in connection with the agricultural industry.
Forces driving extreme rural poverty include lack of capital, unequal distribution of resources and wealth, low agricultural productivity, gender and ethnic discrimination and irrigation deficits due to soil erosion and climate change.
Impact investments which improve agriculture productivity, raise the status of women and ethnic minorities and better irrigation of croplands are key areas to focus on to reduce global incidences of rural poverty.
Specific help should be offered to the owners of small scale farming operations in poor nations of the world.
With over 450 million of these farms existing in the world, often barely providing sustainable subsistence incomes for the families that live on them, more than 2 billion of the poorest people on Earth struggle to earn incomes through rural farming.
Often ignored by the mainstream finance community, these rural communities face unimaginable hardships as a consequence of their daily lives.
Often forced to survive on lands with poor soil quality, lacking infrastructure to get their goods to market and the constant threat of increasingly extreme weather events such as droughts, lack of access to credit and capital investments make a tough situation even more difficult to manage.
Women in Poverty
In many of the most impoverished communities around the world, women play a vital role in the production of food. Often connected to jobs which require clearing of lands, planting, weeding and harvesting of crops as well as the storage of food, rural women work terribly hard to provide the bounty that we often take for granted in the global north.
An estimated 60 to 80% of agricultural labor is offered by women in Africa and Asian, with another 40% coming from those in Latin America. These women often do not have equal access to education or the social mobility that allows for advancement in their lifetimes or those of their children’s.
While women produce more than half of the global food supply, they own less than 2% of the lands used for production and have almost no access to the small business loans necessary to take ownership of the means of production. It is essential that efforts to reduce poverty around the world focus on raising the status of women.
Impact investments which seek to enhance female leadership and ownership in the means of agricultural production are a key area by which to address global poverty. Education and advocacy are secondary areas which can help to combat the cycle of poverty faced by so many rural women around the world.
The Promotion of Peace
Growing the agricultural industry in conflict and disaster ridden countries are a key area to focus on for alleviating the effects of poverty on a global scale. Conflict tears apart families, ravages natural landscape and limits the ability to produce sustainable crop yields on lands which still hold rich soil.
One clear example of economic recovery being drive by agricultural production is Rwanda following the 1994 genocide. At that time, once vibrant coffee farms were left in complete ruin as the effects of war completely decimated local production.
In 1999, a group of coffee farmers in Rwanda formed the Maraba Cooperative to aid local competition in the global market of coffee production. Financing proved a major challenge as money could only be accumulated during the short harvest season. Loans from impact investors were able to bridge the gap and create a more sustainable means for the farmers to purchase the equipment necessary to protect their livelihoods and grow develop their businesses.
Around the world, efforts to promote peace and create economic stability are key areas for impact investment. War destroys communities and ravishes the natural landscape but socially and environmentally conscious investments can help to reverse its effects on a global scale.
In developing nations, agricultural productivity is around one-third of its true potential.
Access to best practices in farming, technology and financing are key areas by which the rural poor can see dramatic improvements in food shortages and wasted resources.
Small scale farming production can be increased and enhanced by efforts to create cooperative efforts which place power in the hands of local communities.
Most of the world’s starving populations live in impoverished rural areas. Even in the United States which is often seen as being prosperous and without the challenges faced by other areas of the world, more than 15% of rural populations struggle with food insecurity.
Around the world, food insecurity is a major area to be addressed by the benefits of impact investment. With better utilization and distribution of resources, we have the means to address rural poverty and ensure that all citizens of planet Earth have access to the nutrition they need to live healthy and bountiful lives.
Resource depletion, deforestation and land degradation are leading causes of rural poverty around the world.
In developing nations, the effects of these have led to lasting challenges. As populations expand, more of the rural poor are forced to struggle with subsistence farming which often leads to environmental imbalances which themselves perpetuate the severity and effects of poverty on a global scale. Generating ecological sustainability is a major area for impact investment.
Rural poverty is intrinsically linked to ecological imbalances as practices such as illegal logging & slash and burn farming become means of survival which devastated the natural environment. Providing funding to rural farmers so they can protect their livelihoods while also recognizing the balance that must be struck with the natural world that drives it.
With adequate funding, education and government sanctioned policies to protect the natural world and promote sustainability, the effects of rural poverty can be reduced.
Exponential, Inc. is proud to be on the front lines of efforts to reduce rural poverty around the world.