Impact Investing

Credit: Stanford Social Innovation Review

What is impact investing?

• A concrete investment whose goal is to achieve financial return as well as positive, social, and/or environmental impact.

• A key distinction between impact investing and other investments similar to it is that impact investing goes beyond simply 'doing no harm' to 'intentionally doing good.'

• Impact investment isn't an asset class, but rather an investment approach that can be used across all asset classes and themes, and is subject to all sorts of risks.

Top 3 Impact Investing firms

• Vital Capital Fund- It is a private equity that focuses on the development of infrastructure, housing projects, agro industrial projects, renewable energy, health care, etc.

• Triodos Investment Management- Being a founding member of the Global Impact Investing Network, it manages over a dozen sustainable investment funds. A few areas of interest include renewable energy, sustainable food, and agriculture (including organic farming).

• Reinvestment Fund- It is a non-profit community development financial institution. The offers pubfundlic policy advice and data analysis services to U.S. cities to help them develop community programs.

Before you start with impact investing, you should:

• Decide on what you care about
• What your strategy is to approach this
• Carve out some funds to experiment
• Learn from experienced peers, professionals, and intermediaries

You need to know!

Despite the fact that money isn't everything, a 2021 survey of impact investors found that more than 88% of respondents reported that their investments met or exceeded financial expectations.