Alpha From Inertia: How Paying for Outcomes Unlocks Impact Investing Returns

Episode notes

The biggest risk investors face right now isn’t just climate change, geopolitics, or emerging-market volatility. The real threat in impact investing is inertia. Capital stays in familiar places because big asset owners can get satisfactory returns elsewhere. So, unless incentives and information change, inertia wins. This episode is about why social investment keeps getting stuck, even when good people across government, finance, and communities are trying to do the right thing - and what actually has to change for money to start moving. It focuses on where incentives misfire and how to scale impact investing and social investment beyond pilot projects. I’m joined by Nick Hurd, former UK minister and now Chair of GSG Impact. Nick has worked across government, finance, and civil society. He helped build the UK’s social investment market, pioneered early social impact bonds, and later stepped away from politics after deciding markets offered more leverage than ministries.

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