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Impact Investing

Impact investing refers to investments made with the intention of generating both financial returns and positive, measurable social or environmental impact. Investors who engage in impact investing aim to address issues such as climate change, poverty, education, or healthcare while achieving competitive returns. Impact investments are typically made in sectors like renewable energy, affordable housing, and social enterprises, combining profit with purpose.

Example

An impact investor funds a solar energy company that provides clean electricity to underserved communities, generating a financial return while contributing to environmental sustainability.

Key points

• Seeks both financial returns and positive social or environmental impact.

• Focuses on sectors like renewable energy, affordable housing, and social enterprises.

• Combines profit with purpose, addressing global challenges.

Quick Answers to Curious Questions

Impact investing aims to achieve both financial returns and measurable social or environmental impact, whereas traditional investing focuses solely on financial gains.

Common sectors include renewable energy, healthcare, education, affordable housing, and social enterprises.

Impact is measured through specific, quantifiable metrics such as carbon reduction, access to healthcare, or improvements in educational outcomes.