A Next Gen Investor’s Predictions On Impact Investing In 2020s


The following interview with Karam Hinduja appeared in Forbes magazine recently. Karam is a member of the fourth generation of the Hinduja family and an active impact investor who shares his predictions for the following decade.


A Next Gen Investor’s Predictions On Impact Investing In 2020s

The decade of 2020s will be hugely significant in investing, as we witness the greatest wealth transfer in the Western world. In the U.S., the baby boomers, which own about 60% of wealth, will mostly be moving into their 70s, and therefore passing their assets to the next generation, or the Millennial generation.

At the same time, we are confronted by the goal to achieve the Sustainable Development Goals (SDGs), by end of the decade. The 17 SDGs are an ambitious agenda set by the United Nations (UN), which include eradication of poverty and attainment of gender equality. To achieve the SDGs, the UN estimates that an additional $2.5 trillion per year will be required. We already see next generation investors stepping into impact investing, looking not only at financial returns but also social and environmental returns, to plug this gap.


With the next generation controlling more and more wealth, 2020s could well be the decade for impact investing to go mainstream. In an exclusive interview with Forbes, Karam Hinduja, a next generation impact investor, shares his predictions on impact investing for the decade. At 29 years old, he is a member of the fourth generation of the Hinduja family, listed on Forbes as the third richest in India.

“In face of the many challenging issues confronting the world, we are seeing a disconnect between intention and action. I believe that it is time for business to take a step up, and at the same time, our generation wants to find meaning and purpose in the work we do,” says Hinduja. Looking ahead to 2020, he feels that it is the perfect time to create a new normal. “

2020 is significant because it is a new decade. 2020 also refers to perfect vision. This sentiment will have a great effect on impact investing.”

Karam Hinduja has already started investing in businesses, such as Hungry, which provides jobs to chefs in the gig economy, Combate Americas, which empowers the Latino community in the U.S., and Karma, a media company targeting impact investors. Looking ahead to the 2020s, he expects his activities in impact investing to accelerate. Looking across the field, he predicts three key movements in 2020s which will bring impact investing to the mainstream:


1. The pressure from consumers

“Already, Millennials and Gen Z are inherently conscious about their consumption habits, where they buy from and what it all stands for,” says Hinduja. This trend is already leading to some companies, particularly in the consumer goods industry, to embrace initiatives such as Fair TradeEthical Fashion Initiative and Fashion Revolution. But he predicts that more companies will be affected: “Companies in the utilities and core services industries have traditionally been able to hide behind the stickiness they have with consumers, but they will also come under pressure to focus on social impact as consumers become more aware and have more choices.”

2. Increasing appeal of emerging markets

“While the U.S. continues to be a great center for innovation, recent political events have soured the taste that many international investors (institutional and private) have towards the US in both public and private markets,” says Hinduja, based in New York. He believes that international investors will look at other markets, and emerging markets will grow in their appeal, particularly as the impact of investment goes further where there is more need. It is also the case that the Millennial generation grew up in a more globalized world and has more cross-cultural experiences than their previous generations. Extending this to investing, they may also be more comfortable investing in other countries.

3. A new wave of investors

Last but not least, Millennials as investors will control more and more capital. For Hinduja, himself being part of Millennial investors, “impact as a term doesn’t even make sense – it’s just investing.” He feels that, “The more dire our global challenges become, the more this group will mobilize with capital and entrepreneurship. Addressing these global challenges is the greatest market opportunities of our generation.”

With these three trends, Hinduja believes that capital deployment towards impact will become mainstream. Yet, he warns against the risk of impact-washing, that is making unsubstantiated claims about the social impact of investments, in the same vein as greenwashing.

“Therefore, the small group of people who actually understand impact measurement need to step out of their echo chambers, stop living at conferences, and actually take a role in being watchdogs to guard against impact-washing.”