Will a changing business climate ahead kick-start renewed interest in Impact Investment?
Firstly what is impact investing?
Impact investing refers to an investment strategy that can not only generate financial returns but also looks to create constructive outcomes in society. This sort of investment strategy actively seeks to make a positive impact through investing - not just create an investment return. For example, some impact investments might be made for the benefit the community or allocated to such things as clean-technology that benefits the environment. Impact investing attracts individual investors as well as institutional investors including hedge funds, private foundations, banks, pension funds, and other fund managers.
Many corporate investors also use an impact investment strategy as part of their commitment to corporate social responsibility (CSR) or out of a sense of duty to positively serve society as a whole. The type of impact that can evolve from impact investing varies based on the industry and the specific company within that industry. But some common examples include giving back to the community by helping the less fortunate or investing in sustainable energy practices to help save our planet.
Because socially and environmentally responsible practices tend to attract impact investors many companies can benefit financially from committing to socially responsible practices.
Impact investing & millennials
Impact investing particularly appeals to younger generations, especially millennials, who often want to give back to society and this trend is likely to expand as these investors gain more influence in the investment market. By engaging in impact investing individuals or entities essentially state that they support the message and the mission of the company in which they're investing and they have a stake in the company's welfare. As more people realize the social and financial benefits of impact investing, more companies will likely engage in social responsibility.
Current thoughts
Many impact investors like to give back to the communities in which they live and in these current uncertain times perhaps some investors will grasp the opportunity to use private investment as a way to support local businesses affected by things such as the current Covid-19 disruption. In fact this is exactly the sort of social purpose that many impact investors will find attractive.
Want to know more?
We want to hear from impact investors who want to make a difference in the local community. Many local businesses may need investment to help them get through these testing times and well in advance of any issues arising we would like to be able to match investors with companies in need of investment so that companies can get through these challenging times in the best shape possible.
