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Case Studies in Impact Investing

The CSE Friday Speaker Series: Eric Archambeau
May 1, 2015 | by Otto Nagengast ’17

Before getting into social entrepreneurship, Eric Archambeau spent over 20 years working in technology. After finishing his studies in Engineering and Computer Science, Eric got his start by working on product design and manufacturing, a move that he recommends to anyone starting out in any field. He later launched numerous ventures, before moving into investing in 2000. Eric is currently a General Partner at Wellington Partners, a pan-European venture capital firm with around 800 million Euros under management.

Eric has also long worked in social entrepreneurship. In fact, his work with Social Impact International, which he co-founded in 2003, played a role in the coining of the very term social entrepreneurship. On Friday, Eric talked about two of his latest projects.

In 2010, Eric co-founded Quadia and is currently chairman of the company. Quadia is an impact investing firm with around 100 million USD in assets. Although still a small firm, Quadia is growing rapidly, and Eric hopes that they will be significant player in the next five years.

At the heart of their investment strategy is to seek out companies that have abandoned all-together the corporate social responsibility approach to social impact and instead have made social responsibility part of their core business model. Many companies make profits their only criteria for success, and to mitigate, to some extent, any negative externalities of their operations, they devote some money to projects that have positive social impact. But Quadia is seeking out firms that have positive social impact in their DNA. And while many impact investing firms gravitate toward investing in developing countries, Quadia also aggressively seeks out opportunities in developed countries.

Eric says that a major constraint for market growth of impact investing firms is impact measurement. How do you quantify the positive social change of investments? Eric explained how before the Great Depression, there was no common accounting system. This made it difficult, if not impossible, for investors to compare companies. The field of impact investing faces a similar obstacle today. Eric says that “measuring impact is the synthesis of many small parts,” which makes constructing a reliable metric a challenge. Quadia employs three full-time analysts that work to build the company’s multi-dimensional impact metric. This enables them to track companies’ progress in terms of impact and to compare impact across companies.

Eric also serves as the Global Chairman of the Jamie Oliver Food Foundation. Eric met Jamie Oliver, the celebrity chef and food activist, at TED 2010. He was struck by the passion and vision that Jamie shared in his TED talk, and afterwards Eric approach him. He asked Jamie if the supply chain of his 80-plus restaurants adhered to the same principles of ethical food sourcing he advocated for in his talk. Jamie didn’t know. A few weeks later, Jamie got back to Eric, after speaking with the chefs and managers of his restaurants, and told him, no—his restaurants did not live up to the standards he preached. He asked Eric to help him change that.

As Global Chairman of the Jamie Oliver Food Foundation, Eric is not only leading the philanthropic arm of the Jamie Oliver Group, Jamie’s for-profit company, but he is also helping the company to put strict ethical standards in place. Soon, all of the seven million meals served at Jamie’s restaurants will be made with food that was sourced adhering to Jamie Oliver’s Food Standards. Because of this transition, the Jamie Oliver Group will soon be an “impact-grade” company for impact investors. And Eric is optimistic that the Jamie Oliver Group could even become one of the first European companies to become B-Corps certified.

Over the past couple of years, there has been a sea change in impact investing. Before, companies couldn’t talk about impact without other companies looking at them like they were crazy. Now, it’s becoming increasingly normal for businesses to talk about impact. Eric said that Quadia does not have to go look for clients; the clients come to them. This is a heartening sign that impact investing is entering the mainstream in the investment world. With his experience in social entrepreneurship and investing, Eric will continue to lead the push among businesses to make positive social impact not just a public relations tool but a fundamental component of their business model.

 

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