Barely unknown ten years ago, Impact investing has risen to become a central theme in the investment world. Gone are the days when people invested purely for the returns up for grabs. The need to direct capital to investments that can create social, environmental, and governance benefits has grown in recent years.
Investors are increasingly turning to impact investing advisory firms such as The Altruist league in a bid to direct capital to investments that can impact employers, clients, and the society at large and generate financial value.
Likewise, impact investors are turning to impact investing services to uncover organizations that positively affect society. For instance, most of them are investing in companies that install solar panels, affordable housing and provide health screening.
Measuring Impact Investing
Amid the frenzy, the big question remains what the real value of impact is investing? While the impact investing landscape is projected to be worth $250 billion, it is impossible to measure the actual value that impact investing is having on society.
Measuring investors’ or firms’ wider societal impacts is not easy as accounting standards for measuring impact investing don’t exist. While it is difficult to measure the actual value of impact investing, it is impossible to see the kind of impact such a form of investment strategy has on the planet and society at large.
According to The Altruist League president Milos Maricic, “The real value of impact investing depends on how impact investing contributes towards having a healthier planet while eradicating poverty, wiping out hunger, expanding access to healthcare, and attaining food security.
Below are some of how the real value of impact investing is increasingly manifesting itself.
Meeting Global Challenges
Impact investors are having a significant impact in addressing various global challenges. Governments are no longer the custodians in addressing some of the world’s most pressing challenges, such as poverty, hunger, and climate change. Instead, private capital is increasingly flowing into project programs and companies to address some pressing challenges.
Environmental impact investing is already gathering pace as investors divert their investments to projects and programs to combat climate change. The true value of the investments will be realized once the climate change phenomenon is brought under control.
Achieving market-rate returns
The real value of impact investing statistics is also manifesting itself in the form of market returns up for grabs in helping solve some of the global challenges. Impact investors whose investments are directed towards providing solutions to today’s problems are well-positioned to be financial winners.
Impact investing consultants are already showing that most impact investments are already producing some of the highest market-rate returns.
One of the emerging trends in impact investing is using ESG investments to stabilize investment portfolios. A study by Morgan Stanley has already shown that ESG focused funds boast on average lower volatility than non-impact funds.
Likewise, investors are increasingly leveraging ESG funds to stabilize portfolios while diversifying holdings to some of the fastest-growing ESG investing sectors.
Align Values with Investments
Impact investing advisory firms has already shown beyond proof that it is possible to pursue a triple bottom line with impact investments. Likewise, the actual value of impact investing consultants is manifesting itself in the way such investments impact people and the planet and generate financial value for investors.
Contrary to perception, values and profit no longer have to compete. Impact investing services
such as The Altruist League have made it possible for millions of people to be responsible investors while not giving up on returns
Fuelling Important Connection
Impact investing has also proved to be highly effective in fuelling connection between big thinkers in the investment world. Human rights activists. Leading entrepreneurs, investors, and development experts are increasingly being brought together by impact investing advisory firms in a bid to solve issues destroying the planet and, in return, generate some returns.
Similarly, the actual value of impact investing lies in how it can bring together people from diverse backgrounds united by the belief it is possible to address societal issues and generate some returns in the process.