What is Impact Investment?
Impact investment is “An investment made with an intention to generate Environmental & social returns along with financial returns and managed with good governance”
It can also be defined as “Investing in companies, organizations or funds based in on their environmental, social and governance policies along with financial returns.”
Organizations, Academicians and Funds usually use the terms;
- Impact Investments
- ESG Investing
- SRI Investing
- Socially Responsible Investing; Also known as sustainable, socially conscious, “green” or ethical investing, is any investment strategy which seeks to consider both financial return and social good to bring about a social change
- Green Investing
- Ethical Investing
- Sustainable Investing
Alternatively and there is very little or no difference between them.
About Impact Investment
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- Impact Investment is geography agnostic
- Impact Investment is sector agnostic
- The key here is that the returns expected are dual in terms of 1) ESG as in Environmental, Social and Governance. And 2) financial returns
- Returns may be below market rate or higher. Does not necessarily mean that these investments are sub market rate.
The Need for Impact Investments To provide capital to address the world’s most pressing issues including harmful environmental changes, depleting energy resources, depleting food resources and lack of access to basic human requirements in terms of housing, healthcare and education.