Retail Impact Investing: Guidebook for Canadian Credit Unions

Purpose Capital and Canadian Credit Union Association

Year: 2016

Over the last decade, impact investing—a targeted approach to investment in companies, organizations, and funds with the intention of generating social and/or environmental impacts alongside a financial return—has gained interest and traction within the financial sector. Many leading global financial institutions are actively engaged as investors, lenders, and wealth managers. Impact investment funds are increasing in numbers and their track records are showing early evidence of realizing positive financial returns and social impact. Governments are also exploring the use of impact investing to address pressing social and environmental challenges, such as affordable housing and climate change.

Globally, the impact investing sector is estimated to have a market size of USD $60 billion, with steady growth projected over the coming years. In Canada, the market is estimated at between CAD $2 billion and $4 billion, and it is expected to show continued growth across the country. Impact investing opportunities have primarily been accessible to institutional and accredited investors. While there is some evidence of growing demand among individual investors for investment products that integrate social and/ or environmental considerations, this has yet to translate into customized strategies and investment opportunities for retail investors on a large scale.

Download the Guidebook for Canadian Credit Unions

This guidebook highlights an opportunity for credit unions to engage further in the impact investing sector by addressing a gap that exists in the retail impact investing market in Canada. The guidebook provides a roadmap for credit unions seeking to create and to deploy their own retail impact investing products targeted at current or prospective members who wish to receive a financial return, while at the same time generating a targeted and measurable positive impact for local or global communities.

The specific objectives for this guidebook are as follows:

  • Introduce the need and rationale for retail impact investing for credit unions;
  • Identify broad trends and evidence around the potential for retail impact investing;
  • Profile retail impact investment products from Canada and globally;
  • Review the key elements of the product development process for a retail impact product;
  • Analyze the strategies, considerations, best practices and enabling conditions for success;
  • Provide resources that credit unions can use in their product development efforts; and
  • Identify a set of priorities and actions to catalyze retail impact investing for credit unions.

Table of Contents

Executive Summary
CHAPTER 1: Introduction

Report Structure
CHAPTER 2: Defining Retail Impact Investing
Impact Investing
Retail Impact Investment
CHAPTER 3: Opportunities & Challenges for Retail Impact Investing
Opportunities for Retail Impact Investing
The Opportunity for Credit Unions
Barriers to Retail Impact Investing
CHAPTER 4: Case Studies
Oikocredit Global Impact GIC – Mennonite Savings and Credit Union
Jubilee Fund Investment Certificate – Assiniboine Credit Union
Resilient Capital Program – Vancity Credit Union
Community Bond – Centre for Social Innovation
Community Investment Note – Calvert Foundation
Investment Fund Note – RSF Social Finance
CHAPTER 5: Roadmap for Retail Impact Investment Products
Product Design
Product Launch
CHAPTER 6: Lessons & Priorities for Retail Impact Investing
Resources & Endnotes