The definition of impact investing is for an individual or group purchasing a share of business to have enough power to impact its direction. And with Elon Musk’s acquisition of Twitter, world has witnessed the first large impact investing that has ever done. What is the impact?
Mr. Musk has been criticizing Twitter’s ability to fiddle with what people can type and who can use its service. He claims he is a big supporter of free speech and he has put his money where his mouth is. It is still not clear how much change he will do to the business plan or the platform. There are many questions still unanswered: How much hate speech will be allowed on the platform? Where is the line when it comes to twitting about violence? The questions are too many to count. But there is one question has been answered. ESG and Impact investment is valuable even when it doesn’t have a great net income or balance sheet.
Mr. Musk has shown that a company that is trying to solve climate change can compete even if it hasn’t made a single profit for years. Because people will believe in it and will continue to support its mission. He has shown this with Tesla. It is possible he is doing the same thing with Twitter.
Twitter is a great tool for big minds, influencers, celebrities and common people to share their opinions without spending too much time. It is a great platform to support the free speech and everything that comes along with it, the good the bad and the ugly. There is no denying that the foundation of a democratic system is free speech. With Twitter’s ability to share people’s opinion publicly within seconds, it has provided the society the ability to be heard. In other words, it is an ESG investment.
However, unlike Tesla, Twitter is an already established brand and many people has formed opinions. Anytime those opinions face a decision of change, it can get ugly real quick. It is going to be a different and possibly more difficult challenge to rally people to support its mission of free speech regardless of its dark and light sight.
But for what it is worth, Mr. Musk has put ESG and impact investing a topic of conversation once again.
