Impact Investing 101

For many people investing is no longer just a way to manage money and (hopefully) benefit from dividends of increasing stock value. Investing has become a way in which people are able to expand their views on global issues and use their purchase power to facilitate positive change, similar to voting. This notion is relatively new in the world of finance and has been dubbed impact investing. In recent years this concept of impact investing has gained a lot of traction as more investors consider other factors than simply profit. With more and more public companies to invest in every day, investors are really taking the time to consider not only will I see a return on this investment but also do I support the work this company is doing. 

What exactly is impact investing?

Impact investing is a way for investors to put their money into businesses and organizations that are committed to making a positive social and environmental impact. In other words, impact investing is all about using your money to do good in the world, while also seeing a financial return on your investment. This can include things like renewable energy, sustainable agriculture, affordable housing, and access to healthcare and education. These businesses are typically focused on creating positive change, rather than just making a profit.

The Impact of Impact Investing

The impact of this more socially conscious way of investing can be significant. By investing in businesses and organizations that are working towards positive change, impact investors are able to support important work to scale and grow their initiatives and ultimately make a larger impact. For example, organizations that are geared towards making electric vehicles more affordable not only results in more electric vehicles on the road but fewer emissions and a greener future.

In addition to the tangible benefits that impact investing can bring, it also helps to create a culture of responsibility and accountability among businesses. By encouraging companies to prioritize social and environmental impact alongside financial returns, impact investing is helping to change the way that businesses operate and the values that they prioritize.

One of the key differences between impact investing and traditional investing is that impact investors are often willing to accept lower financial returns in exchange for the social and environmental impact that their investment is making. This means that while impact investing can be a profitable endeavor, it is not always the most lucrative option available.

Do you consider impact when investing?

As the world continues to face pressing social and environmental challenges, impact investing is becoming an increasingly important tool for creating positive change. In fact, the Global Impact Investing Network estimates that the current size of the impact investing market is around $715 billion (USD), and this number is expected to continue to grow in the coming years.

Impact investing is a powerful tool that can help to create positive social and environmental change. By investing in businesses and organizations that are committed to creating a better world, impact investors are helping to build a more sustainable future for us all. Whether you are an individual looking to make a difference or a large institutional investor, impact investing is a powerful way to put your money to work for good.

Emma Invest has a number of different stock options that allow you to put your money towards initiatives and organizations that you feel are working towards positive change. Whatever you feel passionate about whether it be environmental initiatives or healthcare solutions you can find investments on Emma invest that align with your passions so you can put your dollars to good use.

When investing, your capital is at risk.