What is Impact Investing?

Impact investing is a growing field of investment that is helping to finance solutions to some of society’s biggest challenges.

How is impact investing different from ethical investing?

Ethical investing is focused on avoiding investments that have a negative impact on society or our environment. Impact investing seeks to go a step further. Instead of screening out negative impacts, impact investments are made to organisations, projects or funds which are generating measurable, positive social and environment outcomes, in addition to financial returns.

Impact investing expands the total pool of funds available for social and environmental purposes; it encourages innovative approaches to solving old problems; and recognises that challenges facing society are too large and complex to be solved by government, philanthropy and not-for-profit organisations alone.

 

What is an impact investment?

Impact investments are investments made into organisations, projects or funds with the intention of generating measurable social and environmental outcomes, alongside a financial return. This may be providing finance for businesses in sectors as diverse as aged care, renewable energy and the arts.

Who are the investors?

Many types of investors participate in impact investing including public and private foundations; family offices; banks and other institutional investors such as superannuation funds and insurance companies; governments; fund managers; community finance organisations; and individual investors.

Impact investments can be made directly into an organisation or via a managed impact investment fund. They typically come in the form of a loan (debt) or a private stake in an entity (equity) and span different asset classes.

Want to get involved?

There are many ways individuals and organisation can contribute.  Here are some examples of how people can lead and act to shape a fairer economy and achieve positive social outcomes.