Here is the full transcript of Uli Grabenwarter’s talk titled “Why Impact Investing Doesn’t Work” at TEDxDonauinselSalon conference.
In this talk, Uli Grabenwarter critically examines the shortcomings of impact investing in achieving sustainable development goals. He highlights that despite significant investments, progress towards these goals is lagging, with efforts like renewable energy investment failing to neutralize the increase in global energy consumption. Grabenwarter argues that there’s a prevailing misconception that economic wealth and environmental sustainability can be simultaneously maximized without significant trade-offs.
He criticizes both the financial community and individuals for prioritizing financial returns over true societal impact, and for not being willing to alter their lifestyles for greater societal benefit. Finally, Grabenwarter calls for a more genuine commitment to impact investing that goes beyond mere financial returns, urging a collective move towards creating real, measurable societal and environmental impact.
Listen to the audio version here:
Normally, when people go to a TEDx event, they expect to listen to some amazing experience or an outstanding achievement that somebody has to report. If this is what you came for today, I have to disappoint you, because I have no success story to share. Rather, I am going to talk to you about the biggest disappointments in my professional life.
When I joined the world of impact finance 15 years ago, I wanted to be part of a movement that uses capital and the mechanics of financial markets to create societal value, to save the planet, foster social inclusion, eradicate poverty, give people possibilities no matter their backgrounds, their origin, their race, their gender, or their beliefs.
In 2015, we agreed on the 17 sustainable development goals that we need to meet by the year 2030 to secure the sustainability of humankind. Since then, we have invested trillions of U.S. dollars. And today, we are further away from reaching the sustainability goals than we have been ever before. Let me give you just one example.
The Harsh Reality
In 2022, we reached a level of record of impact investing in renewable energy for a combined total increase of 266 gigawatts, accounting for 84% of the increase in energy consumption in that very year. That means that the effort of impact investing in that year has not even managed to make the increase of our energy consumption climate neutral, let alone to replace any of the 137 terawatt hours of fossil energy that we use every year that account for more than 80% of the global energy consumption and heat up the planet.