Deathly air pollution and slums are two of many challenges cities struggle with globally. Danish sustainable research company  Sustainia has compiled a list of nine cities with the biggest risks, and shows that beneath these risks lie a number of market opportunities.

Indonesia’s capital Jakarta is sinking. Lagos, Africa’s most populous city, urgently lacks 17 million housing units. Seven million people die every year globally from the direct or indirect effects of air pollution – most of them living in bigger cities. Cities around the world struggle with seemingly insurmountable challenges. Sustainia took a look at nine of the cities living with the toughest challenges.

There are a number of underlying causes to these challenges. Although they receive increasing attention from NGO’s, journalists and world leaders, businesses can do their part too. In fact, these risks can be turned into lucrative business opportunities.

Risks open doors to new innovation, especially when you consider the resources mobilized in cities and their strength as drivers of change. For instance, no country has ever raised itself from low-income to middle-income status without significant population shift into cities.

Companies and businesses can take advantage of the tremendous opportunities posed by these global risks, but they need to correctly identify the challenges to pursue these market opportunities.

Cities marred by air pollution
Smog that impedes you from seeing just a few meters ahead, constant coughing and permanent risk of fatal diseases. Air pollution is costing the equivalent of between two to ten percent of GDP across the G20 countries. With 85% of the world’s population living in areas where thresholds for safe air pollution levels have been surpassed, the market for air quality improvement is staggering. It is estimated that the global market opportunities for air pollution control equipment will reach $21 billion by 2021.

1. Tangshan and 2. Xian, China

Take Tangshan – one of China’s most polluted cities. It’s a hub of heavy industry and coal-burning, producing massive amounts of cement, chemicals and steel. The Chinese Government has undertaken a range of political initiatives – from pressing residents to give up coal stoves at home, to the decommissioning or preventing new construction of several hundred coal power plants. $6.4 billion was granted towards cutting carbon, sulfur dioxide and nitrogen oxide emission in 2018. In China, the market opportunities for fighting air pollution will reach an estimated of $3.2 trillion in 2030.

At the Communist Party’s annual congress in 2014, Premier Li Keqiang declared war on air pollution in China. The main reason is that air pollution kills between 1.6-3 million Chinese people annually – giving China the unfortunate ranking of first place for global deaths from air pollution.

Picking up this deadly fight, air pollution programs that monitor air quality in every major Chinese city have been launched, and massive investments in high-tech industries working with solar panels and electric cars have been made.

The private sector is already pursuing market opportunities. The car-sharing provider GoFun offers luxury hybrid vehicles equipped with air purifiers to combat smog. In the Shaanxi province, a novel solution to air pollution is showing early promise – a 100m high air purification tower in the Xi’an home of the Terracotta Army. The tower is funded by the Chinese Government and works by sucking polluted air into large greenhouses around the base, heating the air so it rises up through multiple layers of cleaning filters.

Still, much more has to be done. Even though the Chinese government is taking the lead, there is still a long way to go according to Greenpeace, because policies still favor heavy industry and coal. This opens immense market opportunities for energy companies like Iso Paint Nordic, who produces roof coatings that transforms harmful exhaust gases into harmless salts and generate energy savings by reflecting more rays from the sun.

3. Varanasi, India

The historical city of Varanasi in India, home to one million people, is choking on air pollution that is up to 20 times above safe levels, making it one of the most polluted cities in the world. Pollution is primarily caused by vehicular and industrial emissions, where rates of asthma and patients reporting breathlessness in the city have increased by up to 25% between 2010-16.

Outdoor air pollution caused 620,000 deaths in India in 2012, and the World Bank estimates that it costs the country nearly 8% of its GDP each year. Action is desperately needed if the health risks are to be reduced.

The overall market opportunity in India for electric and hybrid vehicles is expected to reach $29 billion by 2030.

Given that 14 out of 15 of the most polluted cities in the world are Indian, and that the global air quality monitoring market is growing ($3.9 billion revenue in 2017), the market opportunities are stunning.

Improving waste management to avoid burning of garbage and enhancing infrastructure to lessen trucks from entering Varanasi is one of the solutions needed to improve the city’s air quality. The Kolkata Solid Waste Management Project encourages segregation of waste with the ambition of eliminating open incineration of waste. Since their launch in 2006, a gradual decrease in diseases such as skin and liver ailments, malaria and poliomyelitis has been observed.

Pollution from transportation is one of the biggest issues and as demand for personal mobility is expected to increase in Varanasi and triple globally by 2030, market opportunities are huge. Plans to replace all public buses with new hybrid ones in 2020 have been put in place by the government, and a scheme has been launched to provide a $100,000 subsidy for electric and hybrid buses. There is clearly a burgeoning demand for electric vehicles in this city.

Cities in desperate need for affordable housing
Globally, 1.6 billion people will need affordable housing by 2025. At the same time the estimated market for affordable housing is expected to exceed a staggering $1,080 billion by, 2030.

4. Lagos, Nigeria

Africa’s most populous city is experiencing a housing deficit of more than 17 million units, causing slums to sprawl and creating insecure and poor living conditions for millions. An estimate of 2.6 million homes need to be built each year to meet this massive demand – opening up multiple market opportunities.

Creating affordable housing could create over 13 million of jobs in Africa by 2030. In Nigeria, up to 90% of urban housing is produced by private developers, which is a strong indicator of the massive market opportunity for companies to bring the housing deficit down.

In Lagos, the low-income urban dwellers upgrade informal housing to alleviate the housing deficits. At a national level, an innovative urban planning project called Eko Atlantic City, initiated by government departments and foreign and local companies, is projected to house 250,000 residents in an area equivalent to the size of Manhattan’s skyscraper district.

It’s questionable whether the property prices in Eko Atlantic City will meet the housing demands of low-income groups with an average annual income per capita of $7,000. Instead, building affordable houses from shipping containers is trending. Tempohousing Nigeria makes homes out of cargo containers that are 25% cheaper than traditional housing. One-bed houses sell for as little as $1,650.

5. Santiago, Chile

With more than 80% of its population living in cities, Latin America is now the world’s most urbanised region. Sadly, up to 25% of Latin Americans lives in slums or informal housing. These homes are exposed to health risks and are vulnerable to increasingly heavy weather conditions caused by climate change.

With few financing options available to low-income groups in Santiago, residents build their own houses with little or no mortgage. In the favelas of Santiago, slum dwellers use their savings and government subsidies to get help from architects to build half-houses with the other half completed over time. One approach, designed by the architecture company Elemental, has the potential to build housing units that cost as little as $7,500 per unit.

Patrimonio Hoy has come up with a solution to unlock housing opportunities with micro-financing. In collaboration with architects, they provide comprehensive advice on housing plans and issues weekly payback options. Patriomonio Hoy has benefited over 2.3 million people living in informal housing.

Sinking cities in a changing climate
Mega cities are threatened due to rising sea levels, pressure from heavy buildings, illegal pumping of groundwater, lack of proper sewer systems and heavy flooding. The challenge is highly complex as it combines health, environmental, economic and social risks at the same time. Therefore, assessing the market opportunities of sinking cities is difficult, but just ensuring affordable housing, safe drinking water and reliable energy have an aggregated potential value of up to $3.7 trillion.

6. Jakarta, Indonesia

Rivers flowing upstream and buildings slowly disappearing underground are everyday phenomena in the megacity of Jakarta – the fastest sinking city on earth. North Jakarta has sunk 2.5m in 10 years and the Greater Jakarta area, home to almost 30 million people, has sunk by 4m in the last 30 years. Abandoning North Jakarta, which will cost at least $220 billion, has been mentioned as the probable result if private companies and policy-makers don’t take action now. This risks stranding North Jakarta’s two million residents.

Overcoming this grueling challenge requires two actions: regulations need to be properly enforced, and private companies must take the lead in reconstruction and the provision of technological and infrastructural solutions. The Great Garuda, a 32km outer sea wall, is the only major infrastructure project proposed by the government. The plan has as many critics as proponents. It’s being built across Jakarta Bay to create an artificial lagoon along with 17 artificial islands by the Indonesian, Dutch and South Korean governments at a cost of $40 billion.

Ensuring affordable and climate-proof apartment units can improve sanitary conditions and prevent the outbreak of disease and unmanaged waste disposal. This currently costs the city $80 million every year and contributes heavily to the pollution of city rivers.

Investing in green infrastructure such as parks to reduce flood duration and enhance quality of life is crucial to reduce carbon emissions and create jobs for local Jakartans, who will see many more opportunities for work, as the city plans to construct 3,000 parks by 2022.

7. Mexico City, Mexico

Some parts of Mexico City – with its 21 million residents – are sinking at a rate of one meter per year. This poses multiple risks linked to water management and health, preservation of historical sites, traffic disruptions from flooding and housing vulnerability. It has cost the city billions in repairs and flood control since the 1900s. In the poorer neighborhoods, residents can go without tap water for two to three months during the dry season, forcing the government to dispatch water trucks.

No central agency is taking short or long-term responsibility for water resource management as Mexico City spreads across multiple state boundaries. But political decision-makers are aware of the problems related to water crisis. In 2018, mayor-elect Claudia Sheinbaum Pardo pledged a $370 million investment in the city’s water department to deal with the sinking and water crises, thereby opening up opportunities for stakeholders to take action. But long-term solutions are capital intensive and require centralized planning on a regional level to be effective.

The local government has launched a rainwater harvesting system “Aqua a tu Casa” to meet drinking water demands. Each harvesting unit guarantees the supply of up to 40,000 liters of drinking water per year, which means annual savings of around $200 per family. The construction of parks can mitigate water shortage by ensuring that the rain water reaches the water distribution systems to be used as potable water, diversifying the city’s water sources. Parque Lineal La Viga is an excellent example of how investing in public infrastructure can improve climate vulnerabilities through inclusive and green urban planning

Urgent need for access to sustainable energy
In 2015, 193 UN Member States agreed on an ambitious goal to “ensure access to affordable, reliable and modern energy for all by 2030.” In order to reach this goal by 2030, cities have to be onboard. Globally, cities consume more than two thirds of global energy and produce about 70% of greenhouse gas emissions. A market opportunity of between $555-770 billion is expected for companies providing clean and green energy in cities.

8. Buenos Aires, Latin America

In Latin America, demand for energy is expected to increase by more than 50% in the next decade, and greenhouse gas emissions from the building sector alone are expected to double between 2010 and 2030. This opens immense opportunities for energy companies with scalable, sustainable solutions.

Across Latin America, an estimated 25 million streetlights could be replaced, offering $2 billion in potential annual savings. Temperature control and electricity consumption are hot topics. In 2013, the capital of Argentina launched an energy plan to switch more than 90,000 streetlight bulbs to more energy-efficient LED bulbs as a part of a public-private partnership with Philips Lighting. LED lights provide long-lasting performance, with an expected lifespan of more than 20 years, while using 80% less energy and producing the same amount of light as traditional lights.

When the project was completed in 2015, the city had replaced 75% of its lighting stock, saving 50% in operational costs and cutting energy usage by 40-50%. 

9. Sub-Saharan Cities

Africa is starved of electricity. More than two-thirds of sub-Saharan countries are without proper access to electricity grids and are therefore struggling to support hospitals, schools, and sanitation systems, and sustain GDP growth. These risks can be turned into massive market opportunities and some companies are already on the move.

The largest business opportunities have a potential value of more than $296 billion by 2030 and could create nearly 16 million jobs. This could spark a long-lasting social and economic development for the region.

Based on a pay-as-you-go model for solar power, M-KOPA provides clean energy to a wide range of sub-Saharan countries. The company came in 34th on MIT’s list of the ‘50 Smartest Companies in 2017.’ Current customers are projected to save $300 million over the next four years and enjoy 50 million hours of kerosene-free lighting per month.

Lack of proper monitoring systems in sub-Saharan cities is another risk as most scalable solutions requires data monitoring of some sort. The American company Oopower, part of Oracle Utilities, provides smart data solutions for utilities with an opportunity to engage customers in improving their energy efficiency. In 2015, the company provided $1 billion in energy savings for customers and saved over 5.8 million tonnes of CO2.

Eric Jacobsen, the serial entrepreneur and co-founder of private equity firm Dolphin Capital and impact investment platform Gratitude Railroad, spends his workdays at what he calls “the intersection of compassion and capitalism.”

“We work to create financial returns by solving the world’s problems,” Jacobsen says of his two companies. “Capitalism is an organism that changes and grows over time. Entities are realizing that caring about environmental, social and governance (ESG) criteria is better for the bottom line. We work to be ahead of that trend.” This viewpoint has worked well for Jacobsen. Dolphin Capital and Gratitude Road are thriving by investing in innovative businesses that Jacobsen and his partners can believe in.

But as great as Jacobsen feels about the impact of his work, his own personal and charitable investments weren’t always aligned with his beliefs. “I was spending my work time thinking about impact investing,” Jacobsen says, “but I wasn’t doing it personally. I never thought about how the assets in my portfolio could be doing something more meaningful.”

His discomfort with that misalignment kick-started his journey to 100% impact in his personal investments. “If I was going to do this, I needed to go all in,” he explains. This realization led Jacobsen to Toniic’s 100% Impact Network, where he met Brent Kessel of Abacus Wealth Partners (pictured above) at a gathering.

“I was there to share my own portfolio deep dive,” Kessel explains. “I described the progress I’d made towards having 100% of my assets dedicated to social and environmental impact as well as commercial financial returns. Eric was at the time interviewing firms to potentially take over the management of his personal and charitable assets. He was impressed by what I had been able to do personally, and hired Abacus to help him reach his 100% impact goal.”

Abacus has a long history of seeking both positive impact and profitability, and it has proved to be a great fit for Jacobsen. As far back as the early 1990s, the firm offered two to three socially responsible funds that also met Abacus’ standard for financial returns. Over the years, Abacus added more socially responsible funds that clients could opt into. But in 2008, the firm changed its strategy. “At that point, impact investing stopped being an opt-in and became the only thing we offered,” Kessel says. “Our clients have learned that they can have impact and financial returns at the same time, because doing well and doing good isn’t a cliché – it’s extremely doable, as proven by our tripling in size to over $2 billion under management in the past decade.”

Positive impact and positive returns are not the only benefits that Jacobsen has enjoyed in his partnership with Abacus. Going to 100% impact has also changed his relationship with his investments. “I never used to care much about the quarterly rebalancing of my portfolio,” he says. “Now I’m very active in my asset allocation because I’m thinking about how I can use my portfolio to empower women and girls, provide clean air and water, or stem global warming.”

Brent Kessel, Eric Jacobsen’s impact wealth advisor.

While these kinds of decisions may be harder than simply looking for the best returns, Jacobsen also finds them much more interesting. “The more we look at the world, the better off our investments are,” he says. That’s because investors can feel good that their money is creating both meaning and financial growth.

How much financial growth? As Kessel explains, impact investing may not always earn higher returns than traditional investing, but he advises clients not to expect lower returns either. Jacobsen believes that this is an important equilibrium to keep: both too much attention to values at the expense of profit and too much attention to profit at the expense of values are detrimental ways to do business.

“Heart and profit should have an equal balance, like yin and yang,” Jacobsen says. “Both are necessary for an institution’s success – and for humanity’s success.”

Jacobsen also makes it clear that shifting to 100% impact does not have to be an overnight change. “We all matter in the impact space. It’s like standing on the ground floor of a skyscraper looking up,” he explains. “Just take the first step. Choose to dine at the minority-owned local restaurant. Sell your tobacco stock. Invest in a company whose mission you believe in. The journey to 100% impact begins by understanding that every dollar you touch has an impact. Does it have the impact you want?”

People are often confused by the term sustainable growth. While most believe it a worthy objective, its definition is less clear. Does it mean “green growth?” Is it part of the “triple bottom line”?

Does it have to do with the corporate social responsibility (CSR) framework, which suggests that an entity has an obligation to act for the benefit of society at large? And what about the 17 Sustainable Development Goals set by the United Nations? What does sustainable growth really mean?

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When I attended Bentley University as an undergraduate in 1976, I learned how to grow a business and understood that true success was reached when you could sustain that growth. At the time, sustainable simply meant repeatable. During my freshman year, Bentley opened its Center for Business Ethics and taught students that sustainable meant repeatable and ethical. More recently, customers and employees are speaking up, expecting companies to be more socially and environmentally aware, accountable and responsible for the impact they have, and can have, in society.

Today, sustainable growth means growth that is repeatable, ethical and responsible to, and for, current and future communities. And it’s key to the long-term success of any business.

To achieve this worthy objective, it has been my experience that diverse groups of leaders at all levels in companies need to regularly come together and hold themselves accountable to this higher bar. Success starts by asking the right questions.

Repeatable Growth

When I was growing up in Massachusetts my Dad taught me to be a sports fan. We followed the Red Sox, the Bruins and the Patriots. But Dad’s favorite team (and mine) was the Celtics. Dad taught me that real success was building a team that could win repeat championships. By the time I was 11, the Celtics had won 10 of them. Building businesses that could perform like the Celtics did isn’t easy. But there is a formula.

My formula for repeatable growth integrates focused excellence across six areas including customers, competitors, costs, capital, communities and culture. There are lots of questions across these areas, including:

What will my current customers’ needs be tomorrow, and where might a competitor today be an ally tomorrow to face a new competitor? How can I build strategies to reduce both expenses and improve margins as I ensure adequate capital and offer better-than-average returns for my investors? How can I build a reputation as a great corporate citizen and create a change-adaptive culture at the same time?

Ethical Growth

When I took over as President of Global Services at AT&T, I knew one of our strengths at AT&T was our strong set of five company values known as the Common Bond. Our entire organization was steeped in teamwork, innovation, respect, customer focus and integrity. I also knew our team had a tough task. According to our main competitor, MCI/Worldcom, the market was growing at greater than 10% annually, yet our unit was only growing at 4%. We set our growth targets based on that information, and while we doubled our growth rate, we fell short of our goals. But they were lying. On March 15, 2005 it was confirmed they were falsely reporting revenue growth numbers, when CEO Bernie Ebbers was convicted of securities fraud, conspiracy and filing false documents with regulators.

Thankfully, unethical practices are by far the exception in the broader marketplace. But a key question remains. Specifically, are we doing all we can to reinforce our stated values in the day-to-day decision making in our company?

Responsible Growth

Twelve years ago, Andrew Savitz added his perspective on the term sustainable growth when he published The Triple Bottom Line, which advocates for a balanced focus on profit, people and the planet. Around the same time, I heard former competitor and IBM CEO Sam Palmisano promoting his focus on sustainable growth. I loved that Sam made his points with four questions:

Why would someone work for you? Why would someone invest his or her money with you? Why would someone spend their money with you—what is unique about you? And why would society allow you to operate in their region? The first three questions were in line with what I had learned about sustainable as repeatable. But the fourth question was new to me. There was now a higher bar.

Today, there are many views on the expanding scope of corporate social responsibility. In 2015, the United Nations offered a view that sustainability includes a focus on areas as diverse as poverty, hunger, health, education, gender equality, environment and social justice. And as CSR expands and moves beyond the marketplace and the workplace to the environment and into the community, there are lots of new questions.

How can we move quickly at first to determine our impact on the environment? How much water are we using? What’s our carbon footprint? How can we get to a position of “do no harm” and then beyond to opportunities that allow us to actually enhance the environment? What is our obligation to extend our company values to those in the greater community? Should we use our corporate voice to advocate for public policy change? How should we serve?

Progress toward any worthy objective is enhanced when diverse groups of people work together to create solutions. Sustainable growth that is repeatable, ethical and responsible is one such worthy objective. And it all starts with asking the right questions.

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The world-leading British university is seeking to maximize the impact of its academic research on the world.

After decades of incubating science and engineering companies, Oxford University announced on Tuesday it is branching out to support businesses that put people before profit, seeking to maximise the impact of its academic research on the world.

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The world-leading British university is launching a program to support social enterprises, which aim to benefit society or the environment as well as turning a profit, through its Oxford University Innovation (OUI) arm.

“The university wants to make sure the research it produces has the biggest impact possible that it can make on the world at large,” said Mark Mann, innovation lead for humanities and social sciences at the OUI.

Britain is seen as a world leader in the social enterprise sector, with 100,000 companies employing 2 million workers – as many people as its creative industries – according to membership body Social Enterprise UK (SEUK).

The university said there were 25 new businesses in the pipeline. One runs an online game that teaches healthcare workers how to reduce child mortality rates in Africa and will launch before Christmas.

Many leading global universities play a key role in incubating businesses that emerge from their research, usually in the fields of science, engineering and medicine.

Previous companies incubated at OUI include Natural Motion, which evolved from computer simulations developed in Oxford’s zoology department. It worked on the best-selling video game Grand Theft Auto, and was sold for $527 million in 2014.

OUI has already supported Greater Change, which raises money for homeless people in the English city by scanning QR codes on smartphones, allowing them to raise deposits for secure accommodation.

Founder Alex McCallion said OUI helped organize media coverage, produced the business plan and provided the university’s crowdfunding platform, which enabled them to raise 35,000 pounds in funding.

“OUI is able to put it out to all the Oxford networks, the Oxford Angels (investors) network, the alumni network, which brought in a whole lot of funding we wouldn’t have been able to get through a traditional platform,” said McCallion.

By Lee Mannion @leemannion, Editing by Claire Cozens.

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Catholic investment funds are increasingly investing in projects in emerging economies and earning a return while also doing good.

After decades of giving to charity, a growing number of Catholics are starting to put their philanthropic billions into profitable investments instead – a new aid model, backed by Pope Francis, that experts say could help end poverty.

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Catholic investment funds, which manage capital from hundreds of faith-based organisations, are increasingly investing in projects in emerging economies and earning a return while also doing good, experts say.

“Although it’s easy to raise money for humanitarian emergencies, it’s getting more difficult to raise money in long-term development, particularly in countries that now have middle income status,” said Nicholas Colloff of Argidius Foundation.

“There’s definitely an increased level of interest for Catholic based organisations … in impact investing,” said the head of the Swiss foundation, which is directed by Catholic teachings about social justice and giving dignity to the poor.

Impact investing – which seeks to make a profit while also generating social and environmental benefits – is growing in popularity among investors who want to support development goals such as clean energy, education and healthcare.

Some $228 billion was managed in impact investments worldwide in 2017, double that of 2016, amid growing interest from millennials and pension funds, according to the Global Impact Investing Network (GIIN), which promotes the sector.

COMMON GOOD

Charismatic Argentine Pope Francis, who has championed the poor since he took the helm of the 1.3 billion-strong church in 2013, is a key driver of the new investment trend.

At the first of three conferences hosted by the Vatican on impact investing in 2014, he said it was important that ethics play its part in finance, and that markets should serve the interests of people and the common good of humanity.

“This call from the top to encourage us as institutions to look at new ways (to use finance) was really helpful,” said Matthew Zieger, the first national director of impact investing with Catholic Charities USA.

“The Pope has said it quite well – the economy needs to be centred around the human person and there’s a lot of ways to do that better, both as institutions and as individuals.”

Zieger said impact investing to fund affordable housing and job creation was growing at his network, which represents more than 160 Catholic agencies worth about $50 million.

Another organisation spearheading the new mission is Catholic Relief Services (CRS), the church’s U.S.-based humanitarian agency and joint host of the Vatican conferences to explore how the faithful can harness capital to help the poor.

CRS has lent $1 million to banks in El Salvador that lend on to city authorities and cooperatives to spend improving and expanding their erratic, poorly maintained water services.

It aims to give 300,000 people reliable water access in the next three years while also earning “single digit returns” from the loans, said John Simon of Total Impact Capital, which is managing the investment on behalf of CRS.

“There hasn’t been a late payment yet,” he said.

Other big Catholic institutions, such as Ascension Health, the largest non profit health system in the United States, and Georgetown University are also impact investing, according to Amit Bouri, chief executive of GIIN.

Bouri said he had noticed a shift at the Vatican conferences he attended from educating the faithful about the potential of impact investing towards allocating capital to projects.

“There were many more institutional investors present and a much more finance driven discussion, which I think will set the stage for much more impact investment activity amongst Catholic institutions,” he said.

By Lee Mannion @leemannion; Editing by Katy Migiro

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I was in the prime of my wealth management career. About to turn 30, I managed investments for 20-plus multigenerational high-net-worth families. I’d spent several years climbing the corporate ladder, and finding “success.” And then the epiphany struck—success wasn’t about titles and more money; there had to be something deeper.

I started to see a clear separation between people of wealth and people of scarcity; the poor and struggling individuals with whom I came in contact from volunteering. I realized I could bridge the gap, and that I had the empathy, passion and skill set to help.

It took me until age 33 to fulfill one particular goal, to travel in Africa. It marked an entry into impact investing, a process by which people define their values—what they care about, the change they want to see—and link them to both their financial goals.

How is an effective impact strategy built? It involves the following four elements:

1. Uncover values and goals

Impact investing is similar to traditional investing, just a step or two deeper. Traditional investing fundamentals are carried through to an impact investing strategy. The process is designed to identify the issues investors care about it, and the methods they’ll employ to effect change.

It begins by asking two questions:

• If you could only “move the needle” on one or two issue areas, what would they be and why?
• How would each and every investment you make have an impact, whether it’s in their 401(k) or investment portfolio, their consumption decisions and even where to send their kids to school?

This helps to solidify why, exactly, an investor would want to engage in impact investing.

2. Develop a mission statement

These answers form the basis for an impact investing mission statement, which is both similar and different from a traditional business mission statement. It’s similar in that there is a stated intention, something like “I wish to eradicate poverty for one million people.”

It’s different in that it also contains a statement about how it will be accomplished, as well as a metric for measurement.   

The why is in any mission statement. The how and what are added to an impact investing mission statement.

3. Identify areas of interest

How are investor resources then allocated among different issue areas about which they’re passionate? It’s done through something called the “values game,” a practical method for sharpening focus.

Here’s how it works:

One hundred coins are distributed with instructions to allocate among nine high-level issue areas, with the coins naturally representing investable areas both in the traditional sense and from a charitable perspective. No concern is given to guilt and/or worry; it’s a free and open exercise. Your blank canavas.

The investor might have 40 percent allocated to poverty alleviation and economic development, 22 percent to education, 33 percent to women’s empowerment, and the remainder in energy and the environment. The game consists of multiple rounds, each with accompanying questions meant to educate and illuminate investors as to what they really feel and why.

It’s about identifying how deeply, or passionately, someone feels about a particular issue area. Ultimately, it’s a dialogue. It’s coaching investors, rather than simply presenting important issue areas and attempting to determine their interest and capital allocation commitment.

4. Match goals with specific impact investment opportunities

The top three issue areas are the focus of the investment opportunity, and where to concentrate assets to match values. Because impact is subjective to the individual investor, there is no right or wrong answer. It seeks a financial return equal or better, in most cases, to a traditional investment, but it’s also looking to measure its impact

It’s also a journey, over the course of which the investor, and their definition of impact investing, will change. Ask any impact investing veteran and they’ll tell you they’re far from where they started. They’ll also argue that good philanthropists are good investors, and good investors are good philanthropists; they need not be separate.

I entered this business because I truly believe there is enough money to change the world, it simply needs to be allocated effectively. With the rise of impact investing, we have the power to utilize our money to not only garner a financial return, but change a life in the process. I challenge each of you reading to close your eyes and imagine the one issue that means the most to you. Whether it be with time, money or personal resources, I invite you to invest in that issue in whatever way you can at this moment to welcome you into the world of impact investing.

In fast-growing cities across the developing world more than 70 percent of residents lack access to basic services like clean water, affordable transportation or decent housing, a research group said on Friday ahead of a U.N. conference on urbanization.

By 2050, 2.5 billion people, a bigger population than China and India combined, will move into the world’s cities, said the World Resources Institute (WRI), a Washington, D.C.-based group.

Governments, especially in Africa and Asia where 90 percent of the urban growth will take place, need to better prepare for the influx, the WRI said.

Despite budget constraints, officials should work to upgrade essential services in informal settlements or slums in order to save money in the long-term and improve quality of life for newly arrived city dwellers, the report said.

“For many rapidly urbanizing cities, the challenge is to deliver quality core services that are affordable, reach more people and are less resource intensive than traditional solutions,” said Victoria Beard, the report’s lead author.

The call for targeted investments to reduce inequality comes days before government leaders, city planners and U.N. officials gather in Ecuador on Oct. 17 for the Habitat III conference to make a plan for managing mass migration into urban areas.

The United Nations conference on urbanization is held every 20 years with up to 35,000 delegates expected to discuss the challenges of coping with world’s fast growing cities and slums.

Despite the challenges, some fast-growing cities in poor countries are on the right track, the WRI report said.

“Medellin (Colombia) made a commitment to redistribute revenue to make the city more equal,” Beard told the Thomson Reuters Foundation.

“As a result they were able to reduce crime and poverty during a period of sustained growth over 20 years.”

Once notorious for violence as the home of drug kingpin Pablo Escobar, Medellin used public money to build a cable car linking hillside slums with the city centre so residents could find work.

It’s an example that other cities could follow, Beard said, as it’s often cheaper in the long-run to improve informal settlements rather than building roads and other infrastructure to expand suburbs to accommodate new arrivals.

By Chris Arsenault. c The Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women’s rights, trafficking and climate change.