Every investment has an impact – positive or negative, intended or unintended. Impact investors seek to identify and measure outcomes to most effectively invest in companies and projects that are creating positive change, while consciously avoiding and minimizing negative effects.
Impact Investing is different from traditional investing because of:
Investors invest with the intention to generate both a financial return and a positive social and environmental impact.
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.
Impact Investing Strategies Can Include:
- 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 reduce risk in early-stage investments to unlock more conventional capital.
Sustainable Development Goals
“a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030”
Adopted in 2015 by 193 countries, the 17 UN Sustainable Development Goals (SDGs) are increasingly becoming a universal framework for impact investing.
The Growing Demand For Impact Investing
Over the last five years, impact assets under management (AUM) have 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.