You hear about it everywhere these days on social media, in magazines, and on the news. We all want to know more about impact investing, but what is it? Essentially, impact investing is an investment that explicitly takes into account how the investment’s success will affect society and the environment.
What is Impact Investing?
In the simplest terms, impact investing looks to produce a measurable social or environmental benefit from an investment. This benefit can be in financial form with a return on investment but is also in the form of a social return with a poverty reduction.
Why Impact Investing?
Impact investing has many perks: it can be a socially and environmentally conscious investment, and at the same time provide high returns and strong returns to investors. As an investor, impact investing is a way for you to make a difference in your community and the world.
How do Impact Investment Perform Financially?
Impact investing is not easy all the time. As an investor, you are taking into consideration not only how your investment will perform, but also how it will affect the environment and people in your community. There is no formula for making an optimal impact investment, however, you can research impact investing models to see if it’s something that would be worth pursuing. You can also find groups in your community who share your passion for impact investing and who might be willing to help you research and join a group.
Global Examples of Impact Investing
Many organizations and investors have already committed to impact investing. Some examples of impact investment models and funds include Global Risk. Global Risk is an umbrella organization for investors to fund socially and environmentally conscious companies. Another example is Society for Participatory Economics. This group is a nonprofit organization that encourages people to invest in small business ventures that utilize the power of participatory economics or workers’ cooperatives where employees own their businesses and partners co-own them together with customers, and customers share equally in the profits.
Impact investing is an investment that seeks to have a measurable social or environmental impact alongside an attractive financial return. This article has given you some insight into why impact investing is becoming more popular, what it means to be an investor and some examples of impact investment models.