Impact Investing
Key information
Impact investing is defined as the deployment of investment capital seeking to make a positive social and/or environmental difference alongside financial returns.
“All investing has an impact that is largely opaque to the investor, and I think that the work of our field, in part, is to make that impact, positive and negative … transparent to the investor so that the investor can choose.”
— Fran Seegull, Executive Director of the U.S. Impact Investing Alliance
How money is allocated influences which companies are able to grow and what products and services are delivered to people, it is one of the most powerful scarce resources.
Historically, investment decisions were almost exclusively made based on the traditional risk vs return model. Today, ESG ratings have led to asset selection screening based on these factors. Impact investing goes one-step further, specifically directing capital towards companies whose product/service has a positive impact.
Broadly speaking, as much as 1/3 of USA Assets Under Management can be considered as Impact Investments.
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