What It Is and Why You Should Care
Impact investing strategies seek to influence the change created by an enterprise’s operations and products
This can include aspects of:
- Responsible Investing (RI) – including ESG integration.
- Socially Responsible Investing (SRI) – including positive or negative ESG screening.
- Sustainable Investing – Intentional product choice to achieve impact.
- Shareholder engagement – engaging with companies to improve practices and products.
- Catalytic Capital – using concessionary and patient capital to seed and reduce risk in early-stage investments.
Complex problems require innovative solutions – Impact Investing’s ability to shift capital and influence corporate behavior has shown to be a powerful tool for creating social and environmental change.
What makes impact investments different from traditional investments is intention and measurement:
- Investor intention
Investors invest with the intention to generate both a financial return and a positive social and environmental impact.
- Investee intention
Investees business models and operations are consistent with the achievement of the sustainable development goals
- Impact Measurement and Management
Social and environmental outcomes resulting from investments are measured and reported, identifying engagement opportunities and informing capital allocation.
Demand For Impact and Responsible Investment is Growing
Impact investing is on the rise.
Over the last five years, impact assets under management (AUM) has grown globally from $60B USD to $502B USD – a 70% annual growth rate.
2017 data shows that impact AUM in Canada totaled ~ $15B by the end of 2017, up from $9B in 2015.
Sustainable Development Goals
Adopted in 2015 by 193 countries the 17 UN Sustainable Development Goals (SDGs) are “a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030 that was”. Increasingly the SDG’s are becoming a universal framework for institutional and private investors to support positive change.
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