Tesla Motors Inc. Chief Executive Officer Elon Musk is a pioneer when it comes to attracting money aimed at improving society and generating a profit, said Rockefeller Foundation President Judith Rodin.
“Elon Musk is a visionary in figuring out how to attract investment capital,” Rodin said Tuesday at the Investing With Impact conference at Bloomberg LP headquarters in New York. Tesla appeals both to investors who seek a purely financial return and to those who believe the company’s electric cars can benefit the environment, she said. Its stock has surged more than tenfold since the company went public in 2010.
Rodin, who was interviewed by Bloomberg News editor-in- chief emeritus Matthew Winkler, said opportunities ranging from certain public equities to social-impact bonds are drawing investors to a strategy that targets societal or environmental good along with financial returns. Social-impact bonds can finance public and private partnerships targeted at issues ranging from education to reducing prisoner recidivism.
The impact investing industry may reach $1 trillion by 2020, according to a 2010 report by JPMorgan Chase & Co. and the Rockefeller Foundation, which coined the phrase in 2007. Billionaires such as Jean and Steve Case, who co-founded AOL Inc.; EBay Inc. founder Pierre Omidyar; and Shari Arison, owner of Arison Investments, have put their money into impact investments.
Financial companies increasingly are devoting resources to the strategy. BlackRock Inc., the world’s largest money manager, said Feb. 9 that it hired Deborah Winshel to run a new unit dedicated to impact investing. Winshel, previously president and chief operating officer of The Robin Hood Foundation, will run BlackRock Impact.
“Whether it’s banks or investment funds or endowments, there really is an impetus to create more social and environmental good,” Rodin told the conference.
The broader sustainable or socially responsible investment market, which includes impact investing, has steadily grown in the past three years, according to a report released Tuesday by the Global Sustainable Investment Alliance. The size of the market grew 61 percent to $21.4 trillion at the start of 2014 from $13.3 trillion at the outset of 2012, said the group, which is made up of seven sustainable-investment organizations.