Investors around the globe are continuing to make investments for reasons other than purely financial gain. Impact investing is an investment approach made with the intention of generating positive social impact AND solid financial returns, and it has grown exponentially in recent years.
These investments raise capital while procuring a measurable social and environmental impact for the world. The reason these impact investments are so important is because they raise capital to address social and/or environmental issues that we may face in the future. Impact investments can be made in both emerging and developed markets, and across any sector.
The market for impact investing provides capital to focus on the globe’s largest challenges in economic sectors such as renewable energy, conservation, housing, healthcare, education, and sustainable agriculture. It challenges the view that social and environmental issues should only be directed towards philanthropic donations, and that market investments should focus solely on producing financial returns.
While many investors have been making impact investments for years, there has recently emerged a new global effort to speed up the development of a high functioning market that includes and reinforces impact investing. Although the impact market is still fairly new, investors are extremely optimistic about its recent development and expect an increase in size and efficiency in the near future.