The New Company Merging Technology, Impact, and Finance—and Offering a New Chapter for Creating Positive Change
As evolving as it is, the world of impact investing has been lacking. Attractive products that meet the needs and demands of investors are hard to come by, says Fleur Heyns, an investment banking analyst, financial intermediary, and entrepreneur who has been in the impact investing ecosystem for the past twelve years.
This dissatisfaction led Heyns to co-found Proof of Impact, a global online marketplace that offers donors and investors proven, immediate, measurable products to fund. What makes Proof of Impact a particularly rare and modern contribution to the impact investing landscape is its technology. Heyns and Proof of Impact co-founder, Iulian Circo, are offering the public a marketplace of opportunities on the blockchain, which means the information is globally distributed with its integrity honored. "Advances in technology are happening at rapid pace," says Heyns, "allowing us to look at very, very detailed levels of impact—ultimately offering "a whole new set of investment products" that have never been available before.
The way that Proof of Impact works is both simple and revolutionary: Investors scope out the robust inventory of vetted, proven impact missions, fund their choice, and later receive reports that track the effect of their capital. The marketplace is abundant. Investors (and donors) can select from a wide spectrum of proven social and environmental missions, ranging from helping to fund an ACE hybrid energy system, to bolstering health care access in Ethiopia.
We recently spoke with Heyns on the eve of Proof of Impact’s official launch to talk about her personal start to impact investing, the evolving world of conscious work, and the unique technology-impact-finance product her new endeavor is offering the world.
A Q&A with Fleur Heyns
What inspired you to get involved in impact work?
I wasn't born a "do good" kind of person. Sometimes you meet someone and they say, "All my life I wanted to change the planet or save the animals." I've never really had that. This has been more of a journey in that whatever opportunity presented itself, I applied the skills and capabilities that I had.
But I have been increasingly driven to make choices that lead to higher value living. I have been particularly inspired by the teachings of Vedanta by A. Parthasarathy (also known as Swamiji). Swamiji is a world-renowned philosopher who teaches you to aspire to serve a wider group of people beyond yourself and your family.
My upbringing is European. As part of a European family, you don't have a sort of exclusive shareholder mentality. The belief was to always contribute to something more than the financial bottom line, whether it's the other employees in the company or the environment or your community. But despite that, I did study in England and I did go and join an American investment bank. So, I very much became Anglicized and my first company was a for-profit seeking, speculative financial derivatives trading platform, which had no social or environmental impact whatsoever. When I sold it in 2007 and went back to school, I saw all these really smart people who actually did care about the impact that they had—and from that I was sold. I was like, that's the pivot I have to make. Since then, I've only engaged as an advisor, an investor, and an entrepreneur in businesses that have the objective to have a positive impact.
Are there certain social or environmental issues that you're drawn to?
I've always been what I call product agnostic. I don't have any preferences. I'm more of a generalist where I'd rather build an infrastructure that can be applied, successfully, to various categories and scale. So, if there's anything that drives me, it's really more the opportunity has to be able to scale and also has to be financially viable.
What changes are you seeing in the traditional world of finance and investing? Do you see it becoming more values-aligned and impact-focused?
Absolutely. Proof of Impact is backed by Franklin Templeton, which is probably one of the biggest messages. That is a firm that is super conservative and has decided—at a very early stage—to commit to something that is exclusively impact related. So, that's already evidence.
But even more, just look at the underlying trends that are emerging. We were [recently] at Stanford speaking with the professor of marketing and brands. He said that right now, the rates of consumer behavior changes are faster than any other time in history. You have a photograph of a turtle with a plastic straw in its nose and then there is not a single child in the world who would be caught with a plastic straw in their mouth. That is super, super powerful. The ability to share information and images has led to that. And then you take it to a more institutional level. BlackRock recently announced that they're not only going to not invest in extractive industries or coal industries, but they're only going to invest in those companies that can prove—at a more genuine and authentic level—their ability to contribute to a greater sustainability. These are big changes.
So, the demand has definitely changed on the investment side and the way that people invest. But then you can still ask yourself: Even though people might want to do things differently, is it possible? Can we give them the products and the granular data that allows them to invest in that way? And the answer there is yes, too.
That leads us to Proof of Impact. What led you to co-found it?
Since 2008, when I went into the impact investment world, I always played more of an advisor role in helping entrepreneurs find capital. After ten years it got a bit frustrating because, quite frankly, there wasn't a lot of capital being mobilized. And if you even think about the [more than] $500 billion that we supposedly now have in impact investment, that's only about $30 to $50 billion a year of new capital. It's tiny compared to what's out there.
I was also frustrated with the inability of the impact investment world to create attractive products that could meet the needs and demands of investors. You can keep on doing the same thing over and over again. Or you can go more radical and look at a completely new system. With that frustration, I met my business partner, Iulian Circo, who comes from the other side of the spectrum. For the last twenty-five years, Iulian worked in deep impact delivery projects. If you're looking at large scale sanitation projects, that's when you hire someone like Iulian. He is somebody who relentlessly wants to see greater impact being delivered and a greater efficiency of the capital deployed. And he's also a bit of a tech freak.
When we met, I was coming more from the top down and saying, 'okay, this is what investors want,' and he was saying, 'this is what I can get in terms of granular data.' Add to that the advent of blockchain technology, which is one of the keys of transferring digital data into digital assets and converting information into value points. From there we went: Bingo, that's it.
How has the product evolved?
In 2018 we were looking at different concepts and business models. It was only in 2019, when we hired our chief operating officer who comes from Silicon Valley, that we narrowed down the product, which is an end-to-end transaction platform where we build an inventory of proven impact events. And those events need to be acquired through the latest technologies, sensors, devices, et cetera. Once they meet our minimum requirements—that we believe that there's a higher probability of the events having occurred based on these data points—we tokenize that event on the blockchain, which preserves its integrity. Once it's on the blockchain, it's immutable. And then that token can take different paths. The token can either end up in the wallet of a donor. It could be the evidence that a vaccination took place. It could be the evidence that a tree got planted. It could be the evidence that an affordable mortgage was extended.
But that same token can also be the digital form of a security if there is some financial model related to that impact event. For example, there could be a micro loan associated with the purchase of a solar panel. Then that token itself is the investment product.
You've said that Proof of Impact is "reversing the model." How so?
It's not about tracking what you have already given or invested. It's more the other way around saying, 'this has already been proven; now do you want to fund this?' So you're only buying results. You're not buying some promise where someone may say, 'once you give me the money, I'll show you that we've done it.' It's the opposite. We have this database of events that have happened and that are successful, and now you can fund them.
How do you find these events? Do they ever find you?
It's a combination. Once you can show the people who are creating these events that there is demand and money for them, everybody comes to you. Because everybody who is creating impact is always looking for money. And this is probably one of the most intuitive and operationally friendly ways of raising money.
Then there's the other side where we're now increasingly going to corporate. For instance, we have an exclusive travel agent who is taking ten people on a luxe private jet from the Emirates to four lodges in Africa. But the agent said that doesn't fit her conservation profile with the carbon emissions, et cetera. So we can create an impact portfolio based on the countries that they will be visiting that not only neutralizes the carbon emissions, but also shows the impact that we're going to have. We are finding the implementers doing solar installations and where there are trees being planted. We even looked at plastic being removed from the ocean because that's what this particular person cared about. So we have to sometimes go out and find inventory to match the demands.
Proof of Impact is more of a technology company rather than an impact business. What do you mean by this—and how does this make you stand apart?
People talk a lot about technology. It's a buzz word. In reality, I have to say in the impact space to date, there haven't been technologies, other than mobile banking, which is probably the most scalable example of technology at use to solve a problem. What we're doing is we are able to leverage off the latest technologies. Because Iulian is also involved with intellectual ventures, where he constantly invests in the latest verification technologies. We really rely on advancements in any form of technology that can give us accurate data because we don't want to rely on a consultant or an auditor. We want objective data: Sensors, satellites, drones are all great, great providers of objective data.
Then once we have that data, we've done our impact design around it, and we believe that it warrants the event going on the blockchain, then our use of blockchain in our application is probably the most useful application. It is fundamental to what we do so that the data doesn't get corrupted and also that the data also gets converted into a product that a donor or an investor can purchase.
What is your advice to the person who wants to get involved in impact investing but perhaps feels overwhelmed about where to start or what resources to use?
There is an overwhelming plethora of ideas and products and even investment advisors. My advice would be to join the peer-to-peer networks, whether it's an angel network like Toniic or others that operate in the US that have people who have experience and expertise in the impact investment space so you learn off each other. Because to be honest, like with all investing, it is about gaining experience. And it's a relatively new type of investing where the traditional tools and methodologies need to be complemented with some other tools and techniques—and these are evolving all the time. So, surrounding yourself with other people who have experience that you can relate to and learn from is super valuable.
If you already have a certain passion for a particular area, like ocean life, then a platform like Proof of Impact is excellent because it offers you an entire menu within your sweet spot. In Europe we basically are categorizing everything into sustainable development goals. So, if prefer a specific Sustainable Development Goal like renewable energy, you can come onto the platform and buy solar panels in Rwanda and maybe buy some trees in the Amazon. That also allows you to build an impact profile that you can again share with your network and your community, and that others can learn from.
What do you see for the future of impact investing?
I think all investing will have to prove or demonstrate the negative and or positive impacts that that investment has created. I think that's going to become the minimal standard. If you cannot show the consequences of your activities on the environment or in your community, you just won't be investible anymore. And then those investments that can prove positive impacts, they are going to become more demanded, more desirable, and therefore more valuable. And that is going to lead to the fact that the assets with the highest degree of proof and impact are going to trade at the highest value and then it produced the highest returns.
What's your vision for Proof of Impact?
It is similar. We see this world where whether you're a company or a government or an NGO or an investment fund, you are going to have to demonstrate the impact and proof of the impact that you have—or you're going to want to buy the impact that others have. And where do you go for that currently? If you want to have access to data or data services, you go to Amazon Web Services. If you want to go and have access to transport, you go to Uber. If you want to have access to accommodation, you go to Airbnb. But if you want to add access to verified impact, there's nowhere for you to go—and Goldman Sachs or McKinsey aren't going to help you. So, we really see ourselves as the go-to destination for anybody who wants to link impact results and funding. And we already think that we can move billions of dollars in the next five years.
To learn more about Proof of Impact, visit: proofofimpact.com.
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