In the 2022-23 Faculty Distinguished Lecture, Professor of Finance Bing Yu presented “Impact Investing: Driving Capitalists to Do Good While Doing Well.” The lecture was held on Thursday, October 13, 2022, at 7 p.m., in Jones Auditorium.
“Impact investing is an investment approach in which investors make their investments with the intention to generate positive social impact in environmental (E), social (S), and governance (G) areas along with a financial return. It is also called ESG investing,” Yu explained.
This type of investing contrasts with the current capitalist system.
“Maximizing shareholders’ wealth is the goal of business in our current system. The capital invested in business pursues profit in favor of shareholders/capitalists at expense of other stakeholders such as employees, local communities, and clients in our society,” Yu said.
According to Yu, a business model will not be sustainable if it favors one group only.
“For the purpose of sustainability, we want to shift the current economic system of capitalism to the one that generates not only financial return but also the social good,” Yu said. “Only changing the way capital works can make the shift effectively. That’s the reason why we need impact investing.”
In conclusion, Yu emphasized that the decision to choose impact investing depends on the personal preference of the investor. In the end, he said, it is “your money, your decision.”
ESG, or impact investing, is gaining momentum. A recent survey showed that 84% of investors want to integrate personal values into investing, and this rises to 90% among millennials.
“If an investor cares about the common good more than financial return, they might choose impact investing,” Yu said. “The more investors choose impact investing, the more the social good the impact investing will create, and the better the investment return might be achieved.”
Yu joined Meredith College in 2008. His research interests include international corporate finance; impact investing; assets pricing in emerging markets; gender diversity and corporate governance; and law, culture, and corporate finance. His research has been published in journals including the International Review of Financial Analysis, Managerial Finance, and Managerial Auditing Journal. Yu serves as a referee for numerous finance journals, including the Financial Review, Quantitative Finance, and Managerial Finance.
Before beginning his academic career, Yu was a financial analyst and then a manager of corporate finance department in an investment firm in China. He holds a Ph.D. in Finance from Kent State University and an MBA from the University of Toledo.
About the Faculty Distinguished Lecture
The Faculty Distinguished Lecture was designed to represent a significant achievement of research by a Meredith faculty member. The first lecture was presented in 1964 by Professor of English Norma Rose. The Faculty Distinguished Lecture is sponsored by Meredith’s Convocation Committee.