Impact Investing Explained
Impact Investing is an investment approach that seeks to allocate capital where there is a clear social and environmental need, thereby aiming to achieve a measurable impact alongside a more traditional financial return.
Impact Investing is not new, but the sector’s growth has been accelerating since 2011, with JP Morgan estimating a global market worth $77.4bn in assets under management in 2015.*
The recent financial crisis has been a catalyst, in that investors have started to put an increasingly significant value on social and environmental outcomes alongside financial returns. And, increasingly, there are new businesses emerging that apply commercial models to help deliver improvements in society and the environment.
Impact investing seeks to positively include, rather than exclude investments, therefore opening up a wide array of opportunities to investors who intend to generate both a social impact and measurable financial return from their investment.
Importantly the social impact, as well as the potential financial returns, are measured, giving the investor, who is looking for a return on an investment – and a return on impact – more clarity.
Impact Investing Insight
For further insight into impact investing you can find research, discussion and debate on the sector at the links below.
The Social Stock Exchange third annual research book – Produced by investment research firm All Street (www.allstreet.org) , the guide delivers both an independent take on each member firm as well as an overview of the impact investing market as a whole.
The Social Stock Exchange second annual research book – Produced by leading investment intelligence firm Edison, the guide provides an overview of the impact investing market, as well as profiling each of the Social Stock Exchange’s member firms.
The Social Stock Exchange first annual research book – Produced by research company Hardman & Co, this document includes a compendium of organisations which are members of the Social Stock Exchange.
The Global Impact Investing Network (GIIN) is a non-profit organisation dedicated to increasing the effectiveness of impact investing. The most comprehensive source of impact investment research can be found at GIIN’s research library.
Responsible Investor is a dedicated news and events service reporting on responsible investment and sustainable finance for institution and investors globally.
Impact Investing Policy Collaborative is building a global network for policy research and innovation on impact investing markets.
Ethical Consumer is one of the UK’s leading alternative consumer organisations, focused on making business more sustainable and more accountable. It does this through research, awareness raising and the promotion of ethical consumerism.
The Renewable Energy Association represents the UK’s renewable energy industry. It promotes the British renewable energy industry and the products and services that it provides as well as the use of renewable power, heat and transport in the UK.
The UK Sustainable Investment and Finance Association is a membership network for promoting responsible and sustainable investment in the UK. Its aim is to see the UK finance sector lead the way in advancing sustainable development through financial services.
GIIRS is the Global Impact Investing Rating System which aims to set a standard for the reporting and analytics of social and environmental performance of companies and funds.
B Corporation is a non-profit organisation encouraging business to help solve social and environmental problems.
IRIS was developed to provide a common reporting language for impact-related terms and metrics. By standardizing the way organizations communicate and report their social and environmental performance, IRIS aims to increase the value of non-financial data.
Blue and Green Tomorrow provides consumers and investors with independent news, research and information on sustainable and ethical consumerism, investment, travel, and energy. Its aim is to ensure that people have the necessary knowledge to make informed, objective choices on these issues.
NEF (New Econonmics Foundation) is an independent think tank that aims to promote innovative solutions to major economic, environmental and social challenges through analysis and policy debate along with practical on the ground solutions.
The Young Foundation was established in 2005 and has been instrumental in driving thinking, action and change in social innovation in the UK and abroad.
Nesta is an independent charity with a mission to help people and organisations bring great ideas to life. They aim to assist ventures that address major social and environmental challenges in the UK, getting them the capital and development support they need to succeed and grow.
Alliance Magazine provides current and in-depth analysis of the latest developments in the philanthropy and social investment sector.
The Skoll World Forum provides a platform for news, discussion and debate around entrepreneurial approaches and innovative solutions to global social issues.
Invest with Values is the trusted resource for investors learning to align their money and values in ways that generate financial return along with positive social and environmental change.
*Annual Impact Investor Survey 2016 by GIIN, published on May 18, 2016.
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