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PARIS (2 February 2012) — His Highness the Aga Khan, Imam of the Shia Ismaili Muslims and leader of the nondenominational Aga Khan Development Network, urged Urban Land Institute (ULI) Europe leaders at the Institute’s real estate conference in Paris this week to consider the social and environmental impacts of investment decisions.
The Aga Khan, the 2011 recipient of the ULI J.C. Nichols Prize for Visionaries in Urban Development, discussed the value of impact investing during a keynote presentation at a ULI Europe leadership dinner. The industry would benefit from “a great deal” of upside potential if it made investment decisions that pursued a balanced mixed of financial, social, economic and environment goals, said His Highness, who is an unparalleled global leader in development, cultural preservation, and philanthropy.
“A wide spectrum of investors has been increasingly involved in ‘impact investing,’ using a diverse array of assets, employing highly disciplined due diligence and accounting analyses,” His Highness said.
The Aga Khan added that it had been exciting to see the substantial growth of “impact investments” in recent years, and that growth was expected to reach around $500 billion in the next 10 years. But, he noted, there has been relatively little history of it in the property development field. “To me, this could mean a great deal of untapped, upside potential,” he said.
There is a clear need for more knowledgeable intermediaries who “fully comprehend the realities of business risk and reward in the property field – while also understanding what it takes to improve the quality of life for the engaged populations,” said His Highness.
“I believe the Aga Khan Development Network and the Urban Land Institute can bring a great deal to this discussion,” he added.
The Aga Khan Development Network works in more than 30 countries, bringing together a number of agencies, institutions and programs around the world to address complex development issues, such as the provision of high quality healthcare and education services, cultural and economic revitalization, development of micro enterprises, economic development and entrepreneurship, environmental protection, and the advancement of civil society.
Faith has been restored in the potential of regions in the less-developed world, opening up opportunities for investing in places “not previously in the spotlight,” His Highness said. “Sustainable development that improves the quality of life for the peoples of the developing world will depend in the end on efforts that make sense both socially and financially,” he said.
“As this process goes forward, the disciplines and resources of the property investment community will be particularly well-suited to such opportunities,” he said, citing the growing demand for property in the developing world, which reflects not only high birth rates but also the rapid pace of urbanization.
“Dramatic economic development in the industrialized world was invariably accompanied by accelerated urbanization,” His Highness said. “Today, in less developed countries, population growth and urbanization are combining with the rapid growth of the middle class as well as with climatic and geographical constraints on the supply of land — and the likely result is a continuing increase in property values.” This scenario will be played out not only in the largest cities of the developing world, but is also likely to occur in secondary cities, he noted.
The Aga Khan emphasized the importance of civil society institutions — organizations devoted to education, culture, health, and environmental improvement — as being highly influential in the evolution of developing cities. “Even when governments are fragile or disappointing, strong civil society organizations generally remain as key drivers of development. Strengthening the pillars of civil society is the most effective way I know of ensuring a positive social impact in the developing world,” he said.
ULI Chairman Peter Rummell noted that the institute’s selection of the Aga Khan as the recipient of the ULI J.C. Nichols Prize was based on the incredible success His Highness and the Aga Khan Development Network have achieved in improving the quality of life in the world’s most disadvantaged and marginalized communities.
“The Aga Khan and his organization have devoted the highest level of commitment to building community in every sense of the word. In a time of both unrest and great hope in the Arab and Muslim worlds, ULI was moved to honor a global leader whose goal of improved living conditions has provided stability to the most disenfranchised in our global society,” Rummell said. “This is an unprecedented opportunity for ULI to expand its reach to new audiences, and to learn from an individual and an organization whose work has had such a positive, lasting impact.”
The Aga Khan, Rummell noted, has “created communities that give people a sense of belonging and a sense of worth. There are no finer achievements in community building than these.”
About the Urban Land Institute
The Urban Land Institute (uli.org) is a nonprofit education and research institute supported by its members. Its mission is to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide. Established in 1936, the Institute has nearly 30,000 members representing all aspects of land use and development disciplines.