Impact investing

Impact investing refers to a strategy to invest in causes that produce a positive social or environmental benefit in addition to returns on investment

It means that in addition to conventional metrics for measuring the return on investment, impact investment also observes the social and environmental benefit brought as a result of the said investment. 

Being interested in social and environmental issues does not imply that financial returns are trivial. Quite the contrary, impact investing includes an expectation of financial returns that are (at least) comparable to market returns. This aspect also sets it apart from regular cash donations. 

Impact investments exist across a range of different categories. Some of the most popular are:

• Social – focus on building communities, increasing equality and social mobility, as well as aggregate social well-being

• Environmental – focus on the research, development and promotion of sustainable energy alternatives, among others

Health-related – focus on establishing equal access to health across a multitude of geographies, as well as lowering the costs of obtaining high-quality health-care services.