SCOPUS

Impact
Revolution:
By Yaron Neudorfer
How a Change in Mindset
Can Change the World
Photo by Ilya Melnikov
Yaron Neudorfer is founder and CEO of Social
Finance Israel, the first financial institution in
Israel to issue Social Impact Bonds. He also serves
as the Chair of the Israel National Advisory Board
(NAB). He previously served as CFO of The Jewish
Agency, the largest not-for-profit organization
in the country, as well as in the Israeli Ministry
of Finance. Neudorfer holds a BA in Accounting
and Economics from The Hebrew University of
Jerusalem, and a Master in Public Administration
from The Harvard Kennedy School of Government.
In recent years we have repeatedly heard the
terms impact investments, social investments, and
ESG (Environmental, Social and Governance)
investments. These terms all refer to a new direction
in which the world economy is heading, especially
in the last 12-15 years.
We are witnessing a real revolution. More and more
investors (having started with young people) are
interested in investing in line with their values. The
desire is to direct their investments to channels
that also have a social or environmental benefit to
humanity. This will create a tremendous opportunity,
which if we know how to take advantage of, can
significantly improve our lives, our communities, and
our planet for many years to come.
Today, the focus is broader than “impact investments.”
Rather, we are already talking about the concept of
an “impact economy,” a system by which consumers,
investors, and shareholders will challenge entrepreneurs
and executives to show that they generate their profits
in a manner that contributes to public good. In my
opinion, impact economy consists of four main
approaches:
1 Impact Investments - in various and diverse
investment categories (asset classes), including
shares, real estate, contracts, and bonds, there are
investments that look at the return - but also at the
social impact of the investment. Some investors
may be willing, for this purpose, to settle for a
lower return and big impact, and others will seek
market rate returns, but no less important – social/
environmental good. We should be able to offer
both types of investors the right opportunities in
which to invest.
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