The term ‘impact investing’ is a relatively new one, and one that is often misinterpreted. Impact investing is not socially responsible investing (such as avoiding investing in tobacco companies), but rather investing in companies where there is both a profit made and social good. In many cases investors are willing to take a lower return on investment for a higher social impact.
So is this the new big thing? It might well be…more and more investors are scrutinising the decisions they are making, and looking for socially responsible investments. However, much of this type of investment (at this time) is smaller scale, and investors have to conduct the same due diligence on a small investment as a large one, often creating barriers to this process.
However, as impact investing gains momentum and awareness, both social investors and enterprises will continue to grow and develop. It’s a great way to engage younger investors who are perhaps more socially conscious than the generation before.
Check out the links at right for more info.