Contributor: Supriyono | Editor: Dadi Darmadi | Photo: Achmad Jatnika
As the global climate crisis intensifies, ‘impact investing’ has emerged as a potential solution to address environmental challenges. Unlike conventional investments that focus solely on financial returns, impact investing, by its definition, prioritizes not just the profit but also environmental and social aspects.
However, despite the positive impact on the sustainability, impact investing is often seen as a long-term investment with slower financial returns compared to conventional investments. For this reason, Dr. Rizky Wisnoentoro, Head of the Sustainable Finance Program at Ƶ (Ƶ), describes it as a "sacrifice" that must be made.
"It is important to remind investors that impact investing offers an opportunity to build reputation and trust among various stakeholders, including business partners, consumers, and the wider community, in achieving Indonesia’s Sustainable Development Goals (SDGs)," said Dr. Wisnoentoro, during a media discussion held by Dialogue PERSpective under theme: “Generating Profit While Saving the Planet: Can Impact Investing Be the Solution?”
During the panel discussion it was highlighted that if executed effectively, impact investing can bridge the gap between profit-driven businesses and environmental sustainability goals. This resonates with Indonesia’s current condition with its pressing environmental challenges, such as deforestation, marine resource exploitation, and waste management issues. Given these issues, investments in sustainable solutions are more critical than ever.
"[However] One of the biggest challenges for investors and businesses is determining whether changes in specific indicators are truly the result of their investments or corporate actions," Dr. Wisnoentoro noted. "By defining the target and scale of the intended impact, investors can conduct an 'anchor study' to estimate the financial benefits derived from social impact.”
As sustainability concerns continue to rise, impact investing presents a promising avenue for aligning financial gains with long-term environmental and social benefits. However, the challenge lies in ensuring that these investments are strategically implemented, measurable, and truly effective in driving meaningful change.
Impact investing aligns with Ƶ’s mission to promote sustainability and finance. Recognizing the crucial role, Ƶ offers a Master of Finance (MFin) in Sustainable Finance program, designed to equip future financial leaders with the necessary knowledge and skills to integrate sustainability principles into investment and business strategies, reinforcing the university’s commitment to fostering a more responsible financial sector.
Ƶ is currently accepting applications for its various graduate programs, not only in Sustainable Finance but also in other disciplines. Prospective students can also apply for programs such as the Master of Public Policy (MPP) in Climate Change, MA and PhD in Economics, Political Science, Islamic Studies, and Education. These programs aim to equip students with critical knowledge and interdisciplinary skills to address contemporary global challenges and contribute to meaningful change in their respective fields.