Bahaa Eddine Sarroukh, Director, Impact Investments Lead, Philips Foundation Impact Investments BV

HOW DID YOU GET INTO IMPACT INVESTING?

In the multifaceted field of impact investing, where social good intersects with financial viability, every step presents both challenges and opportunities for growth. As a technologist with over 20 years of experience in innovation, including more than 7 years in Africa developing solutions for underserved markets, my journey into impact investing began just before COVID. During this time, I was seconded by Philips to the United Nations, where I worked at the intersection of the private sector, public sector, and civil society. My role was to unlock public and private financial and intellectual capital to support Kenya in achieving its Development Agenda: Affordable Healthcare, Food Security, Affordable Housing, and Manufacturing. I specifically focused on SDG3, which aims to address the equity gap in healthcare access and ensure affordable, quality care for all.

WHAT HAS BEEN THE HIGHLIGHT OF YOUR CAREER?

The highlight of my career has been my role within the Philips Foundation. The World Health Organization says almost half of the world's people don't have access to basic health services, and every year, about a hundred million people become poor because of healthcare costs they can't avoid. This means we need to work together with groups such as non-profit organizations, social entrepreneurs, governments, and healthcare providers to fix the inequity in access to healthcare.

The Philips Foundation is at the forefront of addressing inequities in access to health care by pioneering social investments through innovative models via its impact investments subsidiary. Through my experiences, I strongly believe that making big changes and making sure nobody gets left behind needs a brave approach. In my role within the Foundation, I have supported the setting up of the impact investment subsidiary and I collaborate with social entrepreneurs, offering in-kind support and deploying various investment instruments tailored to their needs to maximize impact while solving healthcare access challenges.

By engaging with diverse stakeholders and leveraging innovative investment models, we have made significant strides in improving healthcare access for underserved communities. This work not only aligns with my personal values but also demonstrates the transformative power of impact investing in creating sustainable, positive change.

CAN YOU SHARE AN EXAMPLE OF A SUCCESSFUL IMPACT INESTMENT YOU HAVE MADE, AND HOW IT HAS CREATED POSITIVE CHANGE?

Instead of talking about just one investment, I want to highlight our whole portfolio as a major success. Our goal is to fix the inequality in healthcare access, which means we need a mix of community health services, primary care, and tools to help healthcare workers do their jobs better.

Since I started in impact investing at the end of 2022, I've taken a broad approach. I built a portfolio of promising enterprises by looking at their technology, business model, and potential to make a lasting impact in healthcare.

With my background in innovation and years spent in Africa working on solutions for underserved markets, I wanted to create something that would truly make a difference. We now have 10 social enterprises in our portfolio, all working to improve healthcare access for people who need it most. They focus on areas like early screening and diagnosis to prevent deaths and complications.

Using digital tools has been crucial. These tools help with everything from ordering supplies and managing clinical operations to offering telehealth services and specialist access. Thanks to these digital solutions, thousands of people now get timely medical help, leading to better health and fewer obstacles to care.

Our ecosystem approach helps reduce healthcare costs while keeping quality high. This model ensures smooth and continuous care through partnerships and effective referrals. This has made healthcare delivery more efficient and effective, greatly improving patient health and wellbeing.

Supporting frontline workers with the right tools and training has been essential. This has boosted their skills and morale, leading to more reliable and high-quality care for patients.

Seeing the results of these investments has been incredibly rewarding. I remember visiting a rural clinic supported by one of our portfolio enterprises and meeting a mother who received essential prenatal care thanks to our investees. Her gratitude and the visible difference we made in her life confirmed why I chose this path.

This experience has shown me how a well-planned investment strategy can make a huge difference. It has strengthened my belief in a broad approach to solving social issues. Building and supporting this portfolio has been a major professional achievement and a deeply personal journey. It has deepened my commitment to continue making positive changes in healthcare through innovative and impactful investments.

HOW DO YOU SEE PHILANTHROPIES AND IMPACT INVESTORS WORKING TOGETHER?

"It takes a village to raise a child," an African proverb that says it all. In the world of social enterprises, think of it like this: creating a business that provides access to care for underserved communities is a bit like raising a child. Just as a child needs lots of love and help from family and neighbors, a social enterprise needs support from the community, including philanthropies and impact investors, to grow and do good.

Impact investing requires collaboration to support social ventures and unlock their full potential in addressing global health challenges. So, for a social enterprise to succeed, it's not just about the entrepreneur and the innovation. It's about everyone pitching in – this includes a mix of blended capital and non-financial support to develop both the solution and the business model while reducing financial risks.

Working within an ecosystem is crucial too. Social enterprises can partner with other social enterprises and actors to amplify their impact. By joining forces, they can increase their reach and effectiveness. And just like raising a child, running a social enterprise takes time and patience. There will be ups and downs, but if everyone remains committed and believes in the mission, positive outcomes can be achieved.

Lastly, a successful social enterprise considers the bigger picture. It's not solely about making money; it's about making the world a better place for everyone. So, they contemplate how their actions impact people, the environment, and society as a whole. By adhering to these principles, social enterprises can grow stronger, make a positive difference, and contribute to creating a better world for all of us.

WHAT DO YOU THINK IS MISSING IN THE INDUSTRY?

Impact investing requires organizational change and readiness.

While financial return is an essential consideration in evaluating investment opportunities in venture capital, true impact investing prioritizes social return. This emphasizes the importance of valuing societal impact alongside financial performance to drive positive change and foster a more equitable and sustainable world. I urge a re-evaluation of how we value sustainable business models, considering the potential for long lasting change within underserved communities, rather than merely funding initiatives that may cease after the funds are consumed. This requires courageous leadership with a higher risk appetite to incentivize social entrepreneurship.

DO YOU HAVE ANY RECOMMENDATIONS FOR IMPACT INVESTORS AND FUND MANAGERS STARTING THEIR IMPACT JOURNEY?

Absolutely! When embarking on the impact journey, it's crucial to embrace the ethos of impact investing: there's no room for ego. It's about prioritizing impact over personal gain and maximizing positive change in the world. Remaining true to the mission is paramount; it's what keeps us grounded and focused amongst the complexities of the investment landscape.

For early-stage social ventures, impact investing isn't about taking the easy path. Instead, it's about establishing a route that aligns with our values and contributes to a broader ecosystem of equity and lasting impact. It's about recognizing that success isn't solely measured by financial returns, but by creating lasting change and being part of a community that shares those values. It's a transformational journey—one that demands dedication, collaboration, and a resolute commitment to making a difference.

FINAL QUESTION: WHAT ARE THE MOST USED (AND ABUSED) CLICHÉS IN SUSTAINABILITY THAT BOTHER YOU?

There are several clichés that come to mind, the first one that came to mind is "doing well by doing good" a statement that can downplay the importance of genuine social and environmental impact. It shows the financial return mindset and oversimplifies the complexities of impact and the trade-offs between financial and social returns.