So You Want to be an Innovative Financier?
Seven trillion dollars. That’s right, trillion. The panel of judges sitting in the front row at the Kellogg-Morgan Stanley Sustainable Investing Challenge (KMSSIC) represented seven trillion dollars of investor capital, mostly institutional. The Sustainable Investing Challenge is a pitch competition open to graduate students around the world that pushes them to think about innovative financial and investment tools that can solve environmental or social challenges. Since its inception six years ago, it has encouraged students to think beyond social enterprises and to focus on the tools -or mechanisms to address funding gaps.
I stood in front of the judges almost exactly two years ago. My team, which also included Sam Chen and Diego Oliviera, designed a pay-for-success program targeted at improving HIV treatment in the United States—specifically Washington D.C., which has the highest HIV prevalence in the country. When we developed the concept, like many of the finalists, we treated it as if we were creating a real, investable opportunity. The competition opened the door to world experts in finance and healthcare. We had more than 50 conversations with experts from across the world eager to engage and share their experience in helping build new innovative finance mechanisms. Last year, close to 350 students from 64 schools across the globe proposed projects in 32 countries. The caliber of the proposals keeps increasing and each year the bar gets higher.
The Sustainable Investing Challenge is a pitch competition open to graduate students around the world that pushes them to think about innovative financial and investment tools that can solve environmental or social challenges.
One alum of the competition—and grantee of The Rockefeller Foundation—Blue Forest Conservation is leveraging financial innovation to provide solutions to pressing environmental issues. In particular, the team recognized and sought to help fix the U.S. Forest Service’s inability to keep up with the magnitude of wildfires in California. Wildfires have a detrimental impact on forest land and surrounding communities and are becoming more frequent and severe with population growth. Not keeping up with the forest maintenance has a two-fold effect: interrupting the natural cycle of small fires resulting in overgrown forests, as well as decreasing the water available in reservoirs.
See the problem? The team at Blue Forest saw a solution. At the competition, the group pitched what is now the Forest Resilience Bond, a shared outcome payment financial mechanism. The Forest Service will pay for proper maintenance of the forest, reducing the need to combat forest fires in the future. The water utilities will pay for the resulting increased water yields, avoiding the costly gray infrastructure required to combat the decreasing yields. With support from The Rockefeller Foundation’s Zero Gap team, Blue Forest Conservation is planning to pilot the idea later this year.
Do you have the next Forest Resilience Bond? If you want to be an innovative financier, the KMSSIC is the premier innovative finance design competition and the best place to get your start. It provides access to mentors who will help pressure test ideas, networking opportunities with leading experts in the field, and a chance to turn a great idea into reality. By combining creative students looking to make a difference with mainstream financial institutions, the competition is producing a new generation of innovative financiers that will bring us one step closer to solving the world’s greatest challenges.
The Kellogg-Morgan Stanley Sustainable Investing Challenge is accepting applications in the form of two-page prospectuses until February 20, 2018.