Samir de Chadarevian. What philanthropy and enlightened entrepreneurs can teach us
Environment — di Valentina Neri
Our interview with Samir de Chadarevian, expert in sustainable development, philanthropy, impact investing and social innovation.
Samir de Chadarevian. What philanthropy and enlightened entrepreneurs can teach us
Our interview with Samir de Chadarevian, expert in sustainable development, philanthropy, impact investing and social innovation.
Wealthy families have enormous capital to deploy, through foundations and family offices (that is, companies specialising in managing their assets). This means they also have enormous power to do something concrete for the planet and for people. The how and the why are examined in "Investing for global impact", a report published by the Financial Times in partnership with GIST (Global Impact Solutions Today) and with the support of British bank Barclays. The fourth edition, presented in March in Paris, paints a positive picture: one in which philanthropy and impact investing are gradually beginning to become the norm, no longer the bold choices of a few enlightened individuals. We discuss this with Samir de Chadarevian, Research Director of the report, with a long track record as an entrepreneur and adviser. Over the years he has specialised in social innovation, impact finance, systemic approaches, SDGs (the UN's Sustainable Development Goals) and ethics as resources for sustainable development.
This report has a very particular approach, in that it interviews a specific category of subjects (foundations and family offices) and because it examines both philanthropy and impact investing. Why did you make this choice?
Our objective is to intercept a movement of people who are accustomed to taking action, by acting as a multiplier. We therefore focused on family businesses, entrepreneurs, family offices and private family foundations. In these subjects we find both entrepreneurial capacity and a specific orientation towards the good of the planet, which is, incidentally, rare — if only we had more far-sighted entrepreneurs! At the centre we place entrepreneurs and the assets they invest both within their own company and in philanthropic activities or social enterprises.
The approach is holistic: from our point of view, the same person is an entrepreneur, an investor in their own company and beyond, can be a philanthropist, a family man… They have many roles but are nonetheless a single person. For the same reason, we believe it is wrong to separate philanthropy, impact investing and investments made on other grounds. We have also gone so far as to include specific questionnaires for those who, to date, are not engaged as philanthropists or impact investors. This direct comparison allows us to learn from one another.
Are there further differences compared to other research?
Setting ourselves apart from more academic research, we want to be ready to reason about what is happening today and what will happen tomorrow, not only about statistical data that requires longer processing times and therefore always arrives a few years late. In our questionnaires we ask respondents what they have done in the past 12 months and what they intend to do in the next 12 months, precisely to give our readers the stimulus they need for their decisions.
In addition to the questionnaires, the research includes a number of interviews with families and other actors, which may be ministries, governments, research centres, social entrepreneurs, NGOs: anyone doing something that from our point of view is interesting, or even controversial. We also interview those who do not want to do impact investing, in order to understand why, and the barriers they perceive.
I imagine the interviews also serve to move beyond talking purely about numbers and instead about people, who may also be very well known, lending you credibility and triggering an emulation effect. In your view, which are the particularly successful interviews?
Absolutely — we try to identify those who are regarded as a point of reference, such as the Roger Federer Foundation.
An interview I personally like very much is the two-voice conversation with the foundation affiliated with Johnson & Johnson and the Aga Khan Foundation: on one side, the emanation of a multinational listed on the stock exchange and driven by profit; on the other, the world's largest network supporting philanthropy, which has religious roots. That interview brings out a wonderful expression: unlikely alliances — improbable alliances that no one would take into consideration, yet which are then realised, because people come to understand that they make otherwise unattainable results possible.
Another very interesting interview is the one with Simone Cipriani, founder of Ethical Fashion Initiative, a network of small African artisans, grouped into districts, who have gradually managed to carve out a space in the international fashion industry. We are talking about hundreds of small businesses that now have a different future thanks to an entrepreneur who created a market for them.
What are your personal expectations for this report? Would you like it to end up on the desk of some major entrepreneur, at Palazzo Chigi or elsewhere?
The expectations are very high, but we are talking about a gradual process. This is a long-term education and dialogue project that — like all genuine commitments — requires proceeding step by step with dedication and consistency. Just as in nature trees need years to grow, we think in the medium term and invite our interlocutors to do the same.
This report is meant to reach the hands, minds and hearts of everyone. Starting with individuals, because today, fortunately, there are also opportunities to invest intelligently and sustainably even for those with 500 or 5,000 euros available. Then, the business world: if we manage to transform companies that today are purely profit-driven, then yes, we will have won, because that would mean not only doing philanthropy or impact investing but changing the business logic of a company from within. We also want to reach the tables of political decision-makers: ministers, governments, mayors.
We have also begun to discuss the SDGs, which we are very fond of because, like us, they are open and address everyone: governments, large companies, small businesses, wealthy and emerging countries alike. This is precisely the logic we have tried to bring to our work.
Compared to the first edition of the report, which dates back four years ago, have you seen improvements in awareness, receptiveness and knowledge of these issues?
Let me make a brief aside. Philanthropy and impact investing are absolutely synergistic with one another — there is no opposition between them. They are two tools that can help improve the world; by acting together on the same initiatives, they can make sustainable what, living on philanthropy alone, could not be so in the long run.
That said, awareness is spreading, to the extent that we have doubled the number of participants. Five years ago, those entering impact investing found it difficult to identify investment opportunities; now there are countless options and it is even possible to build portfolios composed 100 per cent of sustainable investments.
Particularly among pioneers, a school of thought is beginning to spread: if we want to treat all investments in the same way, we must take into account the positive impacts of impact investing and, by the same token, also consider the negative impacts of all other investments. Technically these are called externalities: air, water, roads, resources that a company exploits for its business without paying for them (or paying for only a portion). The cost of compensating for this exploitation falls to governments, and therefore to citizens. It is true that those who invested in that company received their dividends, but it is equally true that sooner or later the community will bear an additional cost (for example in the form of higher charges on the public healthcare system). Today these negative impacts are not taken into consideration. If we were to start taking all impacts — positive and negative — equally into account, the scales would tip even further towards sustainable investments.
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This is an international report that interviews subjects such as family offices, better known in the Anglo-Saxon world, and large foundations, which are somewhat different from those we are used to in Italy. How can we apply it to the Italian context?
We have a good number of respondents from Italy, and we have important examples such as San Patrignano, Fondazione Cariplo, and the cooperative movement. In Italy there is a great deal of philanthropy and a great deal of impact investing, even if it sometimes happens that, at a formal level, they are "dressed" differently. The same can be said of family offices: the model differs from the Anglo-Saxon one, but that does not mean there are no comparable activities, some of them highly advanced.
In Italy, foundations linked to a well-known individual are rare; more often they are linked to companies. Is there potential for growth in this model of philanthropy?
I believe the potential for growth is there. Consider Marino Golinelli, a well-known entrepreneur who is putting himself personally in the spotlight through his foundation — not to become famous (he has no need for that!) but to show publicly what an entrepreneur can do with part of their own wealth. Or consider Investimenti Sostenibili LifeGate, which offers the opportunity to do impact investing through a stock-exchange-listed fund with a level of liquidity that is important for many investors. In Italy there is a great deal of ferment and, as in many markets, more decisive legislative action would be needed to frame and support these initiatives.
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From which angle should the state intervene? In your view, are more rules, definitions or tax relief needed?
That is a very difficult question. For my part, I generally favour activities that do not need to be protected by state subsidies, all the more so because Italy is subject to certain budgetary constraints. Perhaps a good starting point would be to treat fairly those who, as we were saying, benefit from a series of externalities whose cost is then borne by the community. An Italy with somewhat less tax evasion and undeclared work would already offer enormous advantages for those who today operate in full compliance with the law. That said, encouraging aggregation and transparency — both for those who do impact investing and for those who do not — could also help, if nothing else to ensure that everyone competes on a level playing field.
I do not think Italy needs more laws; on the contrary, it would be useful to streamline and simplify our legal system rather than add further weight to a stratification of laws that grows more costly and complicated every day, while also discouraging entrepreneurship and civic participation. I have now been living for seven years in the world of philanthropy, impact investing and social enterprise: there is tremendous ferment and great vitality, which is a pleasure to support and to watch grow.